EU court annuls decision on Spanish tax scheme being unlawful

BRUSSELS (Reuters) - The EU's general court on Wednesday annulled an earlier decision which had declared that a Spanish tax scheme on the deduction for indirect acquisitions of shareholdings in foreign companies was unlawful.

Spain introduced the contested law in 2001 which allowed goodwill to be deducted from taxes in the form of amortisation for holdings in foreign companies of at least 5% held for one year.

The European Commission determined in decisions in 2009 and 2011 that this amounted to illegal state aid, prompting a legal challenge from Spanish companies which had benefited from the tax breaks, including the country's largest bank Santander (SAN.MC).

(Reporting by Benoit Van Overstraeten, Charlotte Van Campenhout; Editing by Sudip Kar-Gupta and Bernadette Baum)