Spanish firm wins €900,000 tax appeal over M4/M6 motorway

Cintra's sale of its shareholding in toll road consortium was at the centre of Revenue's capital gains tax demand

Lawyers for Revenue had claimed Cintra had excavated the land, built the motorway, and regulated the use of the land by motorists. Picture: Laura Hutton/RollingNews.ie

A Spanish company has successfully appealed a tax bill of almost €900,000 issued by Revenue over the sale of its shareholding in the Eurolink consortium that built and operated the M4/M6 Kinnegad-Kilcock motorway.

The Tax Appeals Commission (TAC) has ruled in favour of Cintra, a leading global transport infrastructure provider, against an assessment for €868,388 in capital gains tax in 2016.

Revenue had issued the company with the demand for a GGT payment based on alleged chargeable gains of over €2.6m from the company’s sale of its 66% shareholding in the Eurolink consortium.

Cintra sold its shares in consortium 

Eurolink had been awarded a public-private partnership contract by the National Roads Authority in 2003 to design, build, operate, maintain, and finance a 39km stretch of tolled motorway between Kilcock and Kinnegad.

The consortium provided funding of €322m towards the estimated €550m cost of the project in return for receiving the vast majority of toll revenue for the 30-year term of the PPP contract.

Cintra sold its shares to Dutch private market fund manager, DIF Capital Partners, in 2016.

The Spanish company also launched a legal challenge in 2016 to Revenue’s determination that CGT was to be withheld from the proceeds of sale, but the High Court ultimately ruled that the matter was not suitable for judicial review.

Spanish firm 'disposed of no land' 

At a TAC hearing, Cintra argued that non-resident entities were only liable for CGT in respect of profits from the sale of land in the State or the disposal of shares which derived their value from land in the State.

Cintra maintained it was not liable to pay CGT as the consortium at no material time held any land.

It said the consortium derived its value from its rights under the PPP contract but that it was the NRA who had the right to charge tolls from motorists even though it collected and retained them.

However, lawyers for Revenue claimed Eurolink had excavated the land, built the motorway, and regulated the use of the land by motorists.