The avoidance of double taxation in mergers and demergers: the tax treatment of the goodwill and other related issues

Abstract

The Spanish Corporate Income Tax act foresees certain mechanisms for the avoidance of potential double taxation arising as a consequence of mergers and demergers.

This paper carries out a critical analysis of these mechanisms, specially as regards the tax deductibility of the merger goodwill, considering its context, nature, conditions and differences with the accounting concepts. A wide number of controversial aspects and defects of the regulations are exposed in this analysis, many of which have not been clarified or corrected by the administrative and jurisprudential precedents.