Further austerity cuts hit Spanish corporations

Spanish corporations Telefonica SA, Banco Santander SA and Iberdrola SA may be forced to pay back Spain's government as much as EUR1 billion in goodwill deductions booked after foreign acquisitions before 2007, following the approval of new fiscal measures in Spain, Expansion newspaper reports, citing tax experts. Spain's parliament Tuesday approved a package of extra austerity measures, including the removal of goodwill deductions for some foreign deals that Spanish companies previously enjoyed. The companies forced to pay now will be allowed to recover the cash 21 years after the deal, Expansion adds.

Spanish Businesses such as Banco Santander, Telefonica and Iberdrola may be forced into making payments to the Government of as much as a combined 1 Billion Euros.

This will apply to overseas acquisitions by Spanish companies since 2007, following a recent reform of economic measures.

Tax reductions, referred to as 'Goodwill deductions' had been previously taken advantage of by corporations who had looked to expand their operations overseas, but it now seems that these deductions are to be clawed back.

This is just one of several austerity measures brought in by parliament over the last week, and follow news that Spanish Businesses will also now be expected to pay a certain potion of their annual taxes in advance, as already expected of their employees.