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Creating a holding company can be a strategic decision to organise a corporate group, facilitate new investments or prepare for generational succession. However, to make the most of its advantages, it is important to plan both its incorporation and how it will operate afterwards.
A recent ruling by Spain’s Central Economic-Administrative Tribunal, TEAC, dated 8 October 2026, has once again brought this issue into focus. The Tribunal analysed a restructuring involving a holding company and the tax treatment of profits distributed after the transaction.
The ruling offers an important lesson for business owners and corporate groups: corporate and tax planning should respond to specific business objectives and consider the decisions that will be made after the structure has been created.
A business reorganisation through a holding company
The case analysed began when a business owner contributed equity interests in two companies to a newly incorporated holding company. This transaction was carried out under the special tax regime for mergers, spin-offs, contributions of assets and share-for-share exchanges, known as the FEAC regime, which allows the taxation of certain capital gains to be deferred where the legal requirements are met.
What objectives of the reorganisation are including is centralising the management of the shareholdings, facilitating investments and simplifying a potential business succession.
Subsequently, one of the subsidiaries distributed dividends to the holding company, which applied the exemption available under Spanish Corporate Income Tax.
After reviewing the transaction, the Spanish Tax Agency challenged the application of the FEAC regime. However, when deciding the appeal, the TEAC distinguished between the two contributions that had been made.
- In one case, it cancelled the tax reassessment because an abusive tax advantage had not been sufficiently identified.
- In the other, it considered that an abusive tax purpose had been established, although it corrected both the scope and timing of the reassessment.
This distinction is particularly significant: even within the same restructuring, the specific circumstances of each transaction may lead to a different tax treatment.
What does the TEAC clarify about profits distributed to the holding company?
One of the most relevant aspects of the ruling is the distinction between profits generated before and after the business restructuring.
In the case examined, the TEAC considered that the tax advantage being challenged could be linked to profits arising from transactions carried out before the share-for-share exchange, even if those profits had not yet been reflected in closed annual accounts.
By contrast, it excluded profits generated afterwards because it had not been demonstrated that they were known or expected to materialise imminently when the transaction was carried out.
The Tribunal also distinguishes between the point at which the structure is created and the point at which an abusive tax advantage may actually materialise, as occurred in this case with the subsequent distribution of dividends.
This does not mean that distributing dividends to a holding company is an irregular practice. It is a common transaction within corporate groups, and its tax treatment depends on the applicable legal requirements and the specific circumstances of each case.
The ruling highlights the importance of analysing the initial objectives, the origin of the profits and the subsequent use of the funds together.
It should also be noted that the TEAC itself describes these criteria as non-binding and not yet reiterated, meaning that they do not constitute consolidated doctrine that can automatically be applied to every transaction.
Creating a holding company: a decision that requires business planning
A properly structured holding company can offer significant advantages for the growth and organisation of a business. These include centralising decision-making, planning investments, reorganising activities and preparing for succession.
However, to ensure that the structure genuinely responds to the needs of the business, several aspects should be analysed before it is incorporated:
- Business objectives: determine what the holding company is intended to achieve, whether that is improving group management, facilitating investments or preparing for business continuity.
- Economic and asset position: analyse the companies that will be included in the structure, the shareholdings involved, accumulated profits and potential future distributions.
- Tax planning: review the requirements of the FEAC regime and the tax treatment of the transactions being considered, avoiding decisions that do not reflect the actual business reality.
- Subsequent operation: define how the shareholdings will be managed, what role the holding company will play and how the funds received from group companies will be used.
This analysis should not be limited to the moment of incorporation. Business needs evolve, and the structure should be capable of supporting future investments, acquisitions or changes in ownership.
Specialist advice is key to making the most of a holding company
The TEAC ruling serves as a reminder, through a specific case, that planning a business restructuring does not end when a new company is incorporated.
A holding company can become a valuable tool for improving business organisation, optimising taxation within the legal framework and facilitating long-term strategic decisions. To achieve this, however, both its design and its operation must follow a coherent plan.
Specialist advice makes it possible to assess each transaction from a comprehensive perspective, considering its corporate, tax, asset and business implications.
At LEIALTA, a business and social consulting firm, we provide comprehensive advice and support to family businesses, business owners and corporate groups in the analysis, design and implementation of restructuring processes.
Our objective is to help determine when it may be appropriate to create a holding company, how it should be structured and which aspects should be considered so that it responds to both the current and future objectives of the business.
If you are considering reorganising your corporate group or creating a holding company, discover how we can help you plan the transaction from a strategic, corporate, legal and tax perspective. Consult our business restructuring service.
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