On Thursday the 13th, two days before Ferrovial’s shareholders meeting where the board would consider the takeover proposal, the Ministry of Economy in the Netherlands sent a letter to Ferrovial’s headquarters. Raphael del Pino warned that, as Ferrovial has argued, the decision carried no economic rationale.
Behind La Moncloa’s statements about the Ferrovial president’s motivation lie financial considerations. Beyond the public debate and outrage, there are clear arguments to challenge the government’s claims and to defend Ferrovial’s position as financially grounded.
Ferrovial will ‘sell’ in Board of Directors, which will have two headquarters
A special tax regime for mergers
The proposal to relocate Ferrovial’s headquarters to the Netherlands is described as a merger in which Amsterdam-based Ferrovial Internacional SE (FISE) would acquire Madrid-based parent Ferrovial SA, reshaping the group’s corporate structure. In practical terms, this represents a shift in control within the corporate matrix. Any merger involves injections of capital, acquisitions, and securities exchanges that would trigger a substantial tax bill without the benefits of a merger. The special tax regime for mergers offers significant savings for such operations. In a document titled “Joint cross-border merger project,” Ferrovial informed the CNMV on Thursday, March 2, of its intention to leverage this regime: “Mergers are governed under Title VII of the Tax Code.” Historically, large restructurings, such as the Caixabank-Bankia consolidation, have sought to exploit this regime to defer capital gains tax as they arise.
One condition: not to pay less
When the merger occurs, asset values of the acquired company must be updated, generating capital gains that the Treasury will tax. The fiscal regime for mergers, demergers, asset contributions, and cross-border changes of registered offices within the European Union means that taxes on hidden gains may be deferred, and taxes are generally payable only when assets are sold and gains realized, if applicable. This framework thus requires careful execution to avoid unintended tax charges.
The crux of the matter
At the heart of the discussion lies whether Ferrovial can convincingly argue that relocating headquarters from Madrid to Amsterdam yields genuine economic benefits, including job creation and strategic advantages. If the government or CNMV perceive the relocation primarily as a move to capitalize on the Netherlands’ favorable tax regime, it could limit the duration of the special regime’s applicability. In that scenario, Ferrovial might face substantial Spanish taxation upon exit from the regime. The political debate reflects broader economic questions, with government and opposition figures exchanging sharp critiques. As reported by Cinco Días, Ferrovial executives met with officials from the Tax Office’s Large Taxpayers Center to discuss corporate operations in the wake of the relocation.
Four reasons for Del Pino
The 92-page document titled “Joint cross-border merger project” outlines Ferrovial’s rationale for moving headquarters to the Netherlands. While it notes anticipated tax savings, it does not present them as the primary justification for the transfer. Ferrovial emphasizes a favorable operating environment in the Netherlands, including a robust legal system and strong corporate governance, and argues that a Netherlands presence would reduce financing costs and improve the long-term cost of capital. It also contends that the relocation would raise brand awareness across Europe and beyond. The company views the Netherlands as an optimal platform for potential listing in the United States alongside Spain and the Netherlands, with the United States representing a strategic focus for future growth (the group’s investments for 2023-2027 are heavily oriented toward the U.S.).
Government suspicion: financial motive
The government questions whether Ferrovial’s arguments truly rest on economic substance. The CNMV notes that Amsterdam is not a prerequisite for listing in the United States, which could be pursued from Madrid. The government adds a financial rationale, highlighting that dividend exemptions differ between the Netherlands and Spain, and cites a study suggesting potential tax savings. Other analyses point to accumulated tax credits and the possibility of using Dutch loss-carryforward provisions to achieve relief, though Spain imposes limits on losses. This debate weighs on the overall assessment of Ferrovial’s strategic moves.
Possible outcome
Experts generally agree that while there is a tax component to Ferrovial’s decision, the broader economic benefits claimed for the relocation are substantial. If the company can demonstrate genuine economic advantages, the tax-neutral regime could remain applicable, though it may come under scrutiny regarding duration and scope. The discussion remains deeply tied to the broader political context and regulatory expectations as authorities assess whether the relocation serves the company’s long-term interests or simply exploits favorable tax provisions.