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Company Taxation of an SL

Asked in Corporate Taxation for Spain

A Spanish SL company (A) that owned a residential property that has been sold is now required to pay corporate tax on the profit arising from the sale. The company and its directors do not have the means to satisfy the tax payment due.

In 2006 company A raised a mortgage of €4 million secured on its property. In 2006, €1 million from this mortgage was lent to a separate SL company (B) that shares the same administrator in order to aid the development of a property owned by company B. In 2012 company A sold its property to a third party. The sale was concluded at a price that did not leave company A with any cash benefit. However, there is an accounting profit upon which corporate tax of c. €130,000 is due. Company A has no assets other than the loan to company B which is now not recoverable. What is the legal position of i) company A and ii) the administrator/director of company A in respect of their inability to pay the tax demand. In particular the interpretation of section 305 of the Spanish Criminal Code.
Tax Accounting
Posted by sarkozy on Feb 08, 2014 at 13:20


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