Spain SAN 5537/2021 - ECLI:ES:AN:2021:5537, 20 December 2021

NATIONAL AUDIENCIENCE

Chamber for Contentious-Administrative Proceedings SECOND SECTION

Appeal No.: 0000537 /2018

Type of Appeal: ORDINARY PROCEDURE General Registry No.: 04258/2018 Applicant: MAHOU S.A.

Attorney: Ms. MARÍA ESTHER CENTOIRA PARRONDO

Defendant: CENTRAL ECONOMIC ADMINISTRATIVE COURT

State Attorney

Speaker IImo. Mr. JOSE FELIX MARTIN CORREDERA

S E N T E N C E N C E Nº :

IImo. Mr. President:

D. MANUEL FERNÁNDEZ-LOMANA GARCÍA

Mr. Judges:

D. FRANCISCO GERARDO GERARDO MARTINEZ TRISTAN Dª. CONCEPCIÓN MÓNICA MONTERO ELENA

D. JOSE FELIX MARTIN CORREDERA

D. RAFAEL VILLAFAÑEZ GALLEGO

Madrid, on the twentieth day of December of the year two thousand and twenty-one.

This Contentious-Administrative Chamber of the Audiencia Nacional (Second Section) has heard contentious-administrative appeal no. 350/2018 brought by Mahou, SA, represented by the attorney María Esther Centoira, challenging the ruling of the Central Economic-Administrative Tribunal dated 10 May 2018 (R.G. 5016/14 and 5013/14), rejecting, cumulatively, the claims filed by Mahou, S.A. against two settlement agreements for the concept of Corporate Income Tax, issued by the Chief Inspector of the Tax and Customs Control Unit of the Central Delegation of Large Taxpayers, dated 31 July 2014, one in relation to Act A.02-72419865, years 2008 and 2009, and the other in relation to the Act A.0272420172, years 2010 and 2011.

The respondent was the Administración General del Estado, represented by the Abogado del Estado.

José Félix Martín Corredera, Judge of the Chamber, acted as rapporteur.

FACTUAL BACKGROUND

FIRST. Mahou, SA brought an administrative appeal challenging the Central Economic Administrative Tribunal's ruling of 10 May 2018 (R.G.: 5016/14 and 5013/14), rejecting, cumulatively, the claims brought by Mahou, SA against two settlement agreements for the concept of taxation. against two settlement agreements for the concept of Corporate Income Tax, both issued by the Chief Inspector of the Tax and Customs Control Unit of the Central Delegation of Large Taxpayers on 31 July 2014: one in relation to Act A.02-72419865, 12,303,526.50 euros, including interest, and the other in relation to the Act A.0272420172, 2010 and 2011, in the amount of 4,951,701.39 euros, including interest.

The application seeks a judgment containing the following pronouncements:

"1º.- Annul the Resolution of the Central Economic Administrative Court dated 8 March 2018, jointly dismissing the appeal brought by Mahou, S.A., against the Administrative Tax Settlement Act issued by the Chief Inspector of the Oﬁcina de la Dependencia de Control Tributario y Aduanero de la Delegación Central de Grandes Contribuyentes of 31 July 2014, in relation to Acta A.02-72419865, for Corporate Income Tax, 2008 and 2009, in the amount of twelve million three hundred and three thousand five hundred and twenty-six (12,303,526.50), including interest; and the appeal lodged by Mahou, S.A. against the Administrative Tax Settlement Act issued by the Chief Inspector of the Tax and Customs Control Office of the Central Office of Large Taxpayers of 31 July 2014, in relation to the Act A.0272420172, for the concept of Corporate Income Tax, fiscal years 2010-2011, for an amount of four million nine hundred and fifty-one thousand seven hundred and one thousand seven hundred and one and thirty-nine euros (4,951,701.39), and all other Acts of the Tax Administration from which they arise.

2º-. Order the refund [of] the payments made in the amounts of 12,303,526.50 euros and 4,951,701.39 euros, as stated in Forms 002, which are attached as documents number 1 and 2".

SECOND. The State Lawyer replied to the claim, opposing the arguments put forward therein, and ended by requesting that this process be resolved by a judgement dismissing the contentious-administrative appeal filed, with the appellant being ordered to pay the costs.

THIRD: Once the receipt of evidence had been agreed, the evidence proposed by the plaintiff had been admitted and taken, in accordance with art. 64 LJCA, the parties were sent for conclusions, and the corresponding written submissions were presented by the parties, after which the proceedings were declared closed, pending the appointment of a date for the hearing of the case.

FOURTH: For the vote and judgement, the date set for the vote and judgement was the 15th of December 2021, which was held.

GROUNDS OF LAW

FIRST: The contested decision and its background.

On 31 July 2014, the Chief Inspector of the Office of the Tax and Customs Control Unit of the Central Office for Large Taxpayers issued two assessment rulings in respect of the appellant's corporation tax: one in relation to the tax assessment A.02-72419865 for the financial years 2008 and 2009, in the amount of €12,303,526.50; the other in relation to the Assessment A.0272420172, corresponding to the financial years 2010, 2011, in the amount of €4,951,701.39.

Dissatisfied with the aforementioned resolutions, Mahou, S.A. filed two separate economic-administrative claims, which were joined and which resulted in the decision that is the subject of this appeal.

SECOND. Disputed issues

The disputed issues raised by Mahou, S.A. can be summarised as follows:

First, to determine the depreciation rates for the items included in accounts 2150.00 - 2150.20 - 2150.30 - 2150.40 (installations for the sale of draught beer and installations for the sale of bottled beer) as well as those included in accounts 2.160.10 - 2160.20 (tables and chairs for outdoor terraces).

Second, to select the method for valuing beer sales transactions between related parties between the comparable free price - defended by the appellant - and the net operating margin method (MMNCO), applied by the Inspectorate which gave rise to the correction of the operating results and taxable bases of the related transactions between Cervezas Alhambra SL and the companies Penibética de Cervezas y Bebidas SL and Andaluza de Cervezas y Bebidas SL.

The third plea raises the criterion of the temporary imputation of certain income derived from the subsidy for the project 'Microbiological techniques applied to new brewing matrices', since the Inspectorate considers that part of the amount should be imputed in 2011.

There is a fourth question: to delimit the scope of the deduction base regulated in Article 27 of Law 49/2002 on the ﬁscal regime of non-profit organisations and of the ﬁscal incentives for patronage for propaganda and advertising expenses of multi-year projection (in this case, cans and packs) related to the promotion of events of exceptional public interest.

THIRD: On the coefficients established in the depreciation table approved in the annex to Royal Decree 1777/2004 approving the Corporation Tax Regulations corresponding to the installations for the sale of draught beer and for the sale of bottled beer (accounts 2150.00 - 2150.20 - 2150.30 - 2150.40), on the one hand, and, on the other, for tables and chairs on outdoor terraces (accounts 2.160.10 - 2160.20).

In the case of the installations for the sale of draught beer as well as for the installations for the sale of bottled beer, the discussion focuses on determining whether, in application of the annex to Royal Decree 1777/2004, they should be depreciated in accordance with the coefficients included in Group 412: "Beverage industries", as Mahou, S.A. considers, or in Group 62: "Hotels, restaurants and cafés", as the Inspectorate considers.

And as regards the depreciation of the tables and chairs for the terraces, which the appellant has temporarily loaned to the beer outlets on the basis of their estimated useful life, the appellant considers that this should be done within two years in the case of plastic tables and chairs, and within three years in the case of aluminium tables and chairs, whereas the administration considers that this period should be 10 years.

In fact, both questions have been resolved in the judgement handed down by this Chamber on 7 July 2021, in appeal 343/2018.

With regard to the installations for the sale of draught beer (metal columns of different models, sets of lids, trays, heads, coolers, coils, valves, taps and other elements necessary to dispense draught beer) and for bottle sales (isothermal cabinets of different sizes and uses, refrigerated display cabinets and mini-fridges, bottle racks of different sizes and models and refrigerated counters of different sizes), we stated in the fourth legal basis of the aforementioned judgment and now repeat the following:

"In the opinion of the Chamber, the decision of the present contentious issue is prima facie determined by the Instructions for the application of the depreciation table, which are included in the Annex to Royal Decree 1777/2004, according to which:

"First. - The elements shall be depreciated according to the linear coeﬁcients set for them in their corresponding group or, in the absence thereof, activity grouping.

Secondly. - Elements classified as common shall be depreciated in accordance with the linear coeﬁcients established for them, unless they ﬁgure speciﬁcally in their corresponding group or, if there is no such group, activity grouping, in which case those of that group or grouping shall be applied.

Three. - When a depreciable item does not have a specific linear depreciation coeﬁcient in its corresponding group or, if there is no such group, activity grouping, and it cannot be classified among the common ones, the taxable person shall apply the linear coeﬁcient of the tables of the item which ﬁgures in the same and which is most similar to that item. Failing this, the maximum linear depreciation coefficient applicable shall be 10 per cent and the maximum period shall be twenty years.

Fourth. - For the purposes of the provisions of paragraph 3 of Article 2 of this Regulation, it shall be understood that the coefficients have been established taking into consideration that the elements are used during a work shift, except when, due to their technical nature, they must be used continuously".

In the light of those instructions, it is clear and requires no special interpretative operation, as the appellant maintains on page 38 of the application, that the items are to be depreciated on the basis of the linear coeﬁcients ﬁxed for them in their corresponding group or, if there is no such group, in the absence thereof, activity grouping - first instruction - and that where a depreciable item does not have a specific linear depreciation coeﬁcient set for it in its corresponding group or, if there is no such group, activity grouping, without being classiﬁed among the common ones, the taxable person shall apply the linear coeﬁcient of the tables of the item which ﬁgures in those tables and which most closely resembles that item - third instruction -.

The criterion put forward by the appellant, of applying to the depreciable elements the linear coefficient of the tables ﬁxed for them in their corresponding group, according to the activity carried out by the appellant, is in line with what is ordered by those instructions.

Although some doubt might be raised as to whether all the depreciable items covered by the present appeal fall within linear coeﬁcient No 7 ('mobile refrigeration cabinets, vending machines and other mobile sales equipment') of group 412 applied, the open reference to 'other mobile sales equipment', on the one hand, and the criterion of the greatest similarity contained as the first subsidiary rule in the third instruction, on the other, support the appellant's interpretation and application of the Annex to Royal Decree No 17777/2004.

In contrast, the criterion used by the Inspectorate to regularise the taxpayer's tax situation and confirmed by the Central Economic-Administrative Tribunal's ruling is based on an eminently locative principle which is not incorporated into the aforementioned instructions, either explicitly or implicitly, at least as regards the points under consideration here.

In fact, such a criterion contradicts the rule underlying the inclusion as depreciable items of 'mobile refrigeration cabinets, vending machines and other mobile sales equipment' under No 7 of group 412 applied by the appellant, since it can be seen in all those items that their purpose or vocation is precisely that of being operated outside the premises of the beverage industry concerned. That purpose or vocation did not constitute any obstacle to the inclusion of those depreciable items in that particular group. Despite this, and for the purposes we are examining here, the instructions do not incorporate any restriction or reservation as to the way or manner in which such exploitation may take place'.

Consequently, as in the abovementioned judgment, the ground of appeal relating to the depreciation of both the draught and the bottled beer facilities is upheld.

And as regards the depreciation of the terrace tables and chairs (estimated by the appellant, as noted above, at two years in the case of the plastic tables and chairs and three years for the aluminium tables and chairs), the fifth legal basis of the judgment of 7 July 2021 critically examines the following reports provided by the appellant in that regard (these are the same as those provided in these proceedings and we refer to them as Mahou, S. A. is also the appellant in this case). A. was also the appellant in appeal 343/2018 in which the judgment was handed down so as not to incur in repetitive transcriptions): (i) study by AIMPLAS, Instituto Tecnológico del Plástico; (ii) report of the company Sp Bemer Plastic Group SL (manufacturer of the chair months); and (iii) report of the Federación Española de Hostelería". In this regard, the result of the tests carried out by AIMPLAS, Instituto Tecnológico del Plástico, is decisive, as it can be known with sufficient certainty that the items under examination are indeed depreciated within the period indicated by the appellant, so that Mahou, S.A. has complied with the requirement laid down in Article 11(1)(e) of the TRTA. 11.1.e) of the TRLIS, in the version applicable ratione temporis, according to which: "the amounts which, as depreciation of tangible fixed assets, intangible assets and investment property, correspond to the effective depreciation suffered by the different elements due to operation, use, enjoyment or obsolescence, shall be deductible. Depreciation shall be considered to be effective depreciation when: (...) e) The taxable person justifies its amount".

Consequently, with regard to the depreciation of tables and chairs in terraces, the ground of appeal is also upheld, based on the arguments of our ruling of 7 July 2021, in appeal 343/2018, which must be reiterated as there are no circumstances that justify its variation.

FOURTH: On the method for valuing sales transactions between related parties (Article 16 TRLIS): the comparable free price, defended by the appellant, or the net operating margin method, applicable in the opinion of the Inspectorate.

Penibética de cervezas y bebidas SL and Andaluza de cervezas y bebidas SL are wholly owned by Cervezas Alhambra SL and are therefore related entities.

The main activity of Cervezas Alhambra SL is the distribution and marketing under its own brands of the beer produced by its subsidiaries; that of Penibética de Cervezas y Bebidas SL is the production of beers which, without its own brand, are mainly distributed and marketed by Alhambra (91.46% of its sales in 2010 and 90.40% of its sales in 2011) and the core activity of Andaluza de Cervezas y Bebidas S.L. is the manufacture of beers which, without its own brand, are distributed and marketed by Alhambra (97.40% of its sales in 2010 and 97.14% of its sales in 2011).

Therefore, in accordance with article 16.1.1.1 TRLIS, the transactions between them must be valued at their normal market value.

The inspection considered that the value of the sales made by Penibética de Cervezas y Bebidas S.L and Andaluza de Cervezas y Bebidas S.L to Cervezas Alhambra SL had been below market value, which could be due to ﬁscal reasons as the higher result imputed to Cervezas Alhambra SL to the detriment of its subsidiaries would allow Cervezas Alhambra SL to increase the compensation of negative tax bases from previous years. The margin applied in Andaluza's and Penibética's transactions with Cervezas Alhambra SL affects not only their results but also the margin attributable to Cervezas Alhambra SL: if Andaluza's and Penibética's results turn out to be lower than would be the case under market conditions, those same amounts will be a lower result for Cervezas Alhambra SL which would affect its possibility of offsetting tax losses from previous years.

As mentioned above, Cervezas Alhambra SL had significant BINs pending offsetting; they were generated in 1996 and subsequent years and at the start of the verification period amounted to 47,485,324.63 euros. And in the years 2010 and 2011 the declared tax bases of Cervezas Alhambra SL amounted to 8,953,184.43 euros and 8,213,717.51 euros.

Tax Group 612/09, in which the related parties are taxed, has made the following offsets of tax losses from Cervezas Alhambra SL in years prior to its inclusion in the consolidated group: 2,884,427.23 euros (year of generation: 1996) 6,068,757.20 euros (year of generation. 1997) 2011: 6,781,618.18 euros (year of generation: 1997).

Well, in the settlement, as a result of applying the MMNCO to the transactions between related parties, the declared operating results are readjusted, increasing the results and bases declared by Penibética de Cervezas y Bebidas SL and Andaluza de Cervezas y Bebidas S.L in 2010 by €1,314,040 and €1,556,860 respectively, and correspondingly reducing the operating result and taxable base of Cervezas Alhambra SL in 2010 by €2,870,900.

And here the problem lies in determining which is the (most appropriate) method for establishing the price of related-party transactions. Of the methods regulated in Article 16.4 TRLIS, the dichotomous positions in conﬂict here are, on the one hand, the method of free comparable, maintained by the appellant, and, on the other, the method of the net margin of the set of transactions applied by the Inspectorate.

First of all, in the financial year prior to 2010, the MMNCO was used to determine the transfer prices between related parties, although it is fair to recognise that in that year the transactions between Cervezas Alhambra and its subsidiaries were not included, since the ﬁscal group 612/09 had its first financial year in 2010. Be that as it may, Mahou, S.A. provided the Inspectorate with a series of transfer pricing reports of the companies of the group prior to the financial year 2010 carried out by Ernst & Young (manufacture of Cervezas Alhambra S.L. by Mahou S.A. and with San Miguel, Penibética de Cervezas y Bebidas S.L. with San Miguel, Cervezas Anaga S.A. with Mahou and San Miguel, purchase of Mahou branded beers and other brands manufactured by San Miguel and Cervezas Anaga and sale of beers manufactured by Mahou under the San Miguel brand to San Miguel and purchase of own branded beers manufactured by related entities and other brands manufactured by San Miguel and Cervezas Anaga and sale of own branded beers to related entities and sale of Mahou branded goods manufactured by Mahou S. A.) and in all of them the sale of Mahou branded goods manufactured by Mahou S. A. to San Miguel and sale of Mahou branded goods to San Miguel and sale of Mahou branded goods manufactured by San Miguel and Cervezas Anaga S.A. to San Miguel. A.) and in all of them the MMNCO was used as it was considered the most appropriate to assess whether the brewing activities are in line with the arm's length principle of free competition, using as an indicator of profitability the operating margin on total costs, selecting the brewing companies as the tested party.

As regards the comparables used, Alhambra and Penibética use the AMADEUS and SABI databases, selecting five comparable European brewing companies, using data for 2006, 2007 and 2008.

Well, even hypothetically admitting that the use of the MMNCO in previous years cannot condition the valuation of the transactions between Cervezas Alhambra and its subsidiaries because in those years they were not included and therefore were not analysed in the reports, we must agree with the Inspectorate that with the information available this is the methodology that allows the transfer prices of brewing operations to be assessed, while the use of the method of free comparables is unacceptable. In fact, in the report A-02 (in section A.3.d) as well as in the non-conformity report (3.3 d/) and in section 4 of the valuation report of the operations of Penibética, Andaluza and Alhambra, the reasons for opting for this method are sufficiently justified, having used to select the comparable samples those that meet the requirements of activity and independence in accordance with the OECD guidelines obtained from the internationally accredited AMADEUS database.

At the same time, the Inspectorate rejects the method of the free price comparable to the case, defended by Mahou, SA, for the powerful reason that there is no internal comparable for the same beer, period of time, geographic market, same market stage, etc. In particular, the comparable chosen by the appellant consists of sales made by Penibética and Andaluza to a single customer - El Corte Inglés, which sells the beer as a private label - representing 8.54% and 2.6% of the total volume of those companies' transactions in 2010, These are very small percentages of their operations as a whole, to which must be added the fact that the contracts of the large food and beverage groups with the large superﬁcies or large purchasing centres are extraordinarily complex and incorporate a multitude of conditionalities, discounts, promotions, contributions "without consideration" for speciﬁc campaigns, anniversaries, inauguration of new centres, etc., which make it very unrepresentative to analyse the contracts with the large superﬁcies or large purchasing centres. which make it very unrepresentative to analyse the price applied to a single product without considering the general structure in which it is included and the strategy that underpins it. In addition, there is a large difference in the prices and margins applied in Penibética's sales to El Corte Inglés compared to those applied in its sales to Alhambra for certain products. In this way, it is difficult to accept the comparability claimed by the appellant and, in fact, the application of the method it proposes.

FIFTH: On the criterion of imputation of the subsidy to the project "Microbiological techniques applied to new brewing matrices" in relation to San Miguel Fábricas de Cerveza y Malta in the 2011 Corporate Income Tax.

San Miguel Fábricas de Cerveza y Malta, SA, which was succeeded by the appellant, received a grant for the project 'Microbiological techniques applied to new brewing matrices' consisting of aid of €1,307,207.25 in the form of a repayable loan amounting to €1,111,126.16 and a non-refundable grant amounting to €196,081.09, subject to justification of the eligible expenditure. The first contribution was made in 2011.

The Inspectorate considered that it was appropriate to charge part of the subsidy to 2011, since, as it was non-refundable and recognised, in accordance with the applicable regulations and the consultations of the ICAC, the ﬁscal accrual should be understood to have occurred in the same year in which the ﬁnanced expenses accrued, in the amount of €107,367.19, in accordance with the amount certified and paid by the grantor. On the contrary, the appellant argues that the 2011 certiﬁcation was not deﬁnitive, and could not be considered as a non-refundable grant as the requirement that the requirements for the grant of the subsidy had not been met had not been verified in 2011, so that the imputation could not be made in 2011 but in 2013, which is when the obligor made it on receiving the deﬁnitive certiﬁcation on that date.

Here it is worth noting that Rule 18 PGC (Royal Decree 1514/2007) conditions the "non-refundable" nature of a grant -in which lies the difficulty of the matter- to the existence of an individualised grant agreement, that the conditions established for its award have been met, and that there are no reasonable doubts about the receipt of the grant. This last circumstance is controversial. In the appellant's view, not all the circumstances are present in 2011, as the Inspectorate considers, because in that year the entire subsidised expenditure was conditional upon its justification at each of its milestones, without the justification occurring until 2013 with the ﬁrming of the final receipt certificate once the project had been completed, and the Inspectorate could have verified that all the income was declared in 2013.

Well, there is a first certiﬁcation of 2011 in which the state of development of the project is accredited, the expenses incurred are quantiﬁed and, therefore, a part of the subsidy already accrued, which includes the non-refundable interest and is paid by the grantor. In this state of affairs, the requirement of the rule for charging the part received to the 2011 financial year is met, since there is an individualised agreement for the award of the grant, the conditions established for the award have been met and there is no reasonable doubt as to the receipt of the grant, and since it is a non-refundable grant, the part of the non-refundable grant corresponding to the 2011 certification must be charged as income in the aforementioned financial year in which the expenses incurred are accrued.

In the same sense, reference should be made to ICAC consultation no. 1, BOICAC 75/September 2008, in relation to the requirements of compliance with the conditions of the subsidies in order to be accounted for, stating that when the company has carried out the specific actions required for the grant, future compliance with them must be presumed to have been fulfilled when there are no reasonable doubts that the company did not alter this compliance.

To recapitulate, since there is a certificate attesting to the state of development of the subsidised project and the expenses incurred are quantified and a part of the non-refundable subsidy granted has been paid, and there are no reasonable doubts that the undertaking will alter its conduct in the future, that part must be regarded as non-refundable and this leads to the rejection of this plea.

SIXTH: On the scope of the deduction for expenses for the promotion of events of exceptional public interest regulated in Article 27 of Law 49/2002, of 23 December, on the ﬁscal regime of non-profit organisations and the ﬁscal incentives for patronage.

In this case, the question submitted for the Chamber's consideration is to determine the scope of the deduction provided for in Article 27 of Law 49/2002 of 23 December 2002 on the Tax Regime for Non-Profit Organisations and Tax Incentives for Patronage. In particular, it is disputed whether the cost of expenditure on advertising media and packaging (cans and packs) containing advertising mentions of events of exceptional public interest promoted: Alicante 2008, round the world sailing, IV Centenary of Don Quixote, Año Lebaniego 2006 and Año Jubilar Guadalupense 2007 and Commemoration of the Millennium of the Foundation of the Kingdom of Granada", sponsored by Cervezas Alambra SL, are included in the basis of the deduction. It is considered in the settlement agreement that the deductible advertising expenditure is restricted to the insertion of the lettering of the logo and other advertising elements, a criterion that is maintained in the contested agreements, the TEAC basing its conclusion on the STS of 13 July 2017 (cassation 1351/2016).

Well, in its ruling of 20 July 2021 handed down in appeal 4081/2018, the Supreme Court has resolved the controversy to be elucidated, correcting the criterion established in its previous ruling of 13 July 2017 (cassation 1351/2016), on which, as we have just said, the TEAC's decision is based. With its argumentation and solution, we can consider the problem of specifying the expenses that can be included in the base of the deduction provided for in art. 27 of Law 49/2002 to be concluded and settled, including the cost of the tins and packs containing advertising mentions of the promoted event, which leads to the appeal being upheld.

In order to demonstrate the Supreme Court's argument, it will suffice to reproduce here the paragraphs of the judgment noted which contain the essence of the argument, copied from the third and fourth legal grounds.

The third ground, devoted to setting out the Supreme Court's new criterion, is expressed in the following terms:

"The criterion of the judgment under appeal cannot be accepted, despite the fact that its rationale is a reference to our aforementioned STS 1247/2017, of 13 July . On the contrary, we must take as a reference the previous judgment of the Chamber of the National Court of 10 March 2016 (RCA 64/2014 ), which, in turn, cites and follows the criterion contained in the previous judgments of the Chamber itself of 3 May 2012 (RCA 251/2009 ), 16 May 2013 (RCA 143/2010 ) and 60/2016, of 18 February ( RCA 424/2013 )."

[...]

"Based on all of the above, the jurisprudential line that we recovered from the Chamber of the Audiencia Nacional concluded in the following terms:

"Therefore, the basis for the deduction cannot be limited to the advertising expenditure, or to the part of the additional expenditure generated by the inclusion of the logo, and this whatever the advertising medium, including packaging and means of production, as the rule does not distinguish".

In short, what is relevant is not the nature of these expenses, but that in all cases these expenses serve, in addition to the company's own purposes, to promote the event, without the Consortium having to pay for this advertising or promotion".

This sitting, the legal interpretation of Article 27 of the Law on the Tax Regime of Non-Profit Organisations and Tax Incentives for Patronage, is shown in the fourth ground of law of the judgment, which ﬁlly reproduced is as follows:

"As we have expressed, we must leave without effect the doctrine established by the Chamber of instance in the judgment under appeal --expressive of our previous doctrine contained in the STS ---, having to respond, once again, to the question posed by the order admitting the present appeal about us determining "how to calculate the deduction in corporation tax of 15 per cent of the propaganda and publicity expenses for the dissemination of events of exceptional public interest, provided for in Article 27 of Law 49/2002, of 23 December 2002, in relation to the purchase of packaging bearing the logo of such events, and a distinction must be made, within the advertising medium or vehicle, between the part which fulfils a strictly advertising function and the part which fulfils other functions linked to the ordinary needs of the business activity; or ordinary needs of the business activity; or, on the contrary, whether the application of the deduction should be made on the total cost of the packaging incorporating the logo of the events as the basis for the deduction".

And we have to answer by pointing out that the calculation expressed "must be made on the total cost of the packaging incorporating the logo of the events as the basis for the deduction".

This conclusion is endorsed in two other appeals in cassation deliberated in the same act: appeal 1773/2018, with a judgement also dated 20 July 2021, and appeal 6716/2017, with a judgement dated 21 July 2021. These judgments refer in their entirety to the judgement handed down in appeal no. 4081/2018.

With this argumentation, we can consider the problem concerning the calculation of the corporate tax deduction of 15 per cent of the advertising and publicity expenses for the dissemination of events of exceptional public interest, provided for in Article 27 of Law 49/2002, on the ﬁscal incentives for patronage, in relation to the acquisition of packaging incorporating the logo and promotional elements, to have been concluded and, in deﬁnitive, this determines that this ground of appeal is upheld.

SEVENTH: The contentious administrative appeal must therefore be partially upheld in the following sense:

1st.- To annul the Resolution of the Central Economic-Administrative Tribunal of 10 May 2018 (R.G.: 5016/14 and 5013/14), as well as the settlement agreements of which it is the cause, as regards the rectification of the depreciations in the terms referred to in the third ground, as well as the deduction in quota for the promotion of events of exceptional public interest (sixth ground) which must include the acquisition costs of the supports incorporating the logos of the promoted events.

2nd.- Conform in all other respects to the Resolution of the Economic-Administrative Tribunal.

EIGHTH: Decision on costs.

As the appeal is partially upheld, there is no need for an order for costs.

JUDGMENT

In view of the foregoing, this Court has decided:

To partially uphold the contentious administrative appeal brought by Mahou, SA , against the decision of the Central Economic Administrative Tribunal dated 10 May 2018 (R.G.: 5016/14 and 5013/14), rejecting the claims brought by Mahou, SA against the two settlement decisions by the Central Economic Administrative Tribunal of 10 May 2018 (R.G.: 5016/14 and 5013/14). against the two settlement agreements for the concept of Corporate Income Tax, issued by the Chief Inspector of the Tax and Customs Control Unit of the Central Delegation of Large Taxpayers, dated 31 July 2014, in relation to the Assessments A.02-72419865 and A.0272420172, financial years 2008 and 2009 and financial years 2010 and 2011, respectively, annulling the resolution of the TEAC appealed against as well as the assessments of which it is the cause in the terms referred to in the seventh ground of this decision and upholding in all other respects the resolution of the TEAC. Without costs.

The present judgment is subject to appeal in cassation which must be prepared before this Chamber within 30 days from the day following that of its notification; in the document preparing the appeal, compliance with the requirements established in Article 89.2 of the Law on Jurisdiction must be accredited, justifying the objective interest of the appeal.

Thus by this our judgement, testimony of which will be forwarded in due course to the office of origin for legal purposes, together with the administrative file, where appropriate, we pronounce, order and sign it.

PUBLICATION: The foregoing judgment has been read and published by the Illustrious Judge Rapporteur of the same.

JOSE FELIX MARTIN CORREDERA, the Chamber for Contentious-Administrative Proceedings of the Audiencia Nacional being in public hearing on the same day of the date, it is agreed and ﬁrmed.