Among the urgent measures adopted concerning the refinancing and restructuration of the enterprise debt in Spain, there are relevant novelties.
The Risk Ranking of Restructured Debts by the Bank of Spain
Within one month after the Royal Decree-Law becomes effective, the Bank of Spain will establish public homogenous criteria for the ranking as normal risk for the restructured operations because of a refinancing agreement.
Extending Exclusions in Determining the Cause of Company Dissolution in Spain
The Royal Decree-Law extends, for the financial years ending in 2014, the exclusion of the impairment losses related to fixed assets, investment property, and stocks of the calculation to determine if a debtor is in a situation of mandatory reduction of capital, ground for dissolution, or the object of insolvency.
Taxation Aspects in Spain
The Royal Decree-Law includes taxation measures aimed to improve the legal pre-bankruptcy framework of the refinancing agreements in which, with the consensus between the debtor and the creditors, the value of assets maximizes and that of liabilities reduces or delays to avoid insolvency.
The taxation measures of that legislation consist of reducing or differing from the taxation of the redemption operations of debts or the agreements of debt moratoriums resulting from the Spanish Insolvency Law.
In particular, in the Corporate Income Tax, the absence of taxation is established in the case of debt capitalization, unless the latter has been the subject of a derivative acquisition by the creditor for a value distinct from its face value, and a specific imputation system for the debtor’s income deriving from the agreements of debt moratoriums is introduced.
On the other hand, the exemption in the Tax on Capital Transfers and documented legal acts has extended to the deeds that contain debts or loan deductions, credits, and other obligations.
For additional information regarding taxation and insolvency law in Spain,
