Spanish authorities have launched a high-profile tax investigation into CVC Capital Partners, targeting one of the firm’s top executives and raising concerns across the country’s private equity industry, according to a report by the Financial Times.
Javier de Jaime Guijarro, a managing partner overseeing buyouts in Spain and Italy, is under investigation for alleged tax fraud linked to the 2017 sale of hospital chain Quirónsalud, one of Spain’s largest private equity exits. Prosecutors claim CVC and de Jaime misclassified investment profits as capital gains rather than income and used overseas holding companies, potentially avoiding over €350m in taxes.
The probe focuses on carried interest arrangements and the use of Dutch and Luxembourg entities in fund structuring. De Jaime declared his carried interest and paid taxes on portions of it, but Spanish authorities contend that part should have been taxed as employment income under rules that were unclear at the time.
CVC disputes the allegations, asserting that the likelihood of a successful claim by Spanish tax authorities is low. Nevertheless, legal experts warn the case could have broader implications for private equity in Spain, potentially prompting firms to rethink fund structuring and incentive arrangements to comply with local tax law.
The case also spotlights Spain’s evolving stance on buyout taxation and the treatment of offshore holding vehicles, which have historically been standard in global private equity transactions.
De Jaime and CVC have declined to comment, while authorities continue to gather evidence before deciding whether to bring the matter to trial.
