Spanish fund fight drags on

The Spanish government may have backed down over its proposal to give tax breaks to domestically-registered mutual funds. The capital gains tax deferral has now be extended to cover the SICAV structures, but the international fund managers seem far from satisfied. Indeed, the concession seems only to have riled them further, going by the appearance of various government officials at IBC's Spanish fund management conference at the end of September. Clearly, the Spanish government has succeeded in sowing seeds of suspicion among the international asset manager. Regardless of the fact that, assuming the amended tax bill is passed, any disadvantages to foreign managers will be very marginal, it seems that non-domestic managers now have a deep distrust of the legislators motives.