Supreme Court Limits Retroactive Deductions, IBEX Giants on AlerACS, Actividades de Construccion y Servicios SABME_DLY:ACSActivTradesBy Ion Jauregui – Analyst at ActivTrades The Spanish Supreme Court has set a significant precedent by preventing companies from deducting expenses corresponding to already prescribed fiscal years, restricting the possibility of making retroactive tax adjustments. The ruling, issued on October 7, establishes that expenses recorded outside their natural fiscal period cannot alter the taxable base of closed years, even under the principle of full regularization. This decision, originating from a dispute between a company and the Spanish Tax Agency, clarifies that only expenses properly recorded in their corresponding fiscal year can be deducted for Corporate Income Tax purposes. Otherwise, such amounts must be charged directly to net equity, without affecting the accounting or tax results of the current year. The impact of this ruling particularly affects large IBEX 35 companies with complex financial structures or long-term assets. Construction and infrastructure companies such as ACS, Ferrovial, Sacyr, and Acciona may be most exposed, as they often manage multi-year contracts, concessions, and disputes involving retroactive economic adjustments. Likewise, energy and utility companies — Iberdrola, Endesa, Naturgy, Repsol — manage multi-million euro provisions for regulatory compensations or tax disputes, which could be non-deductible if identified after the prescription period. In the financial sector, banks and insurers such as Santander, BBVA, CaixaBank, and Mapfre may also face limitations when adjusting provisions or impairments from previous years. The ruling reinforces the importance of accounting prudence and timing in expense recognition, noting that the tax authorities can review negative tax bases up to ten years back, but deductions only affect the last four non-prescribed fiscal years. Technical Analysis of ACS ACS shares closed yesterday at €72.60, slightly down for the week after reaching an all-time high of €73.20. The daily chart confirms a solid bullish structure in both medium and long term, supported by an ascending trendline initiated in January 2024. The 50-, 100-, and 200-day moving averages remain aligned upwards, reinforcing the consistency of the trend. In the short term, the stock shows a phase of lateral consolidation around the October 15 price range, seeking momentum to reach its next technical target of €75, which aligns with the projection of the ascending channel. It will be crucial to monitor whether the buying momentum holds, as the stock could pause before breaking resistance. Key support levels are at €69.50, €65, and €62.85, zones where the stock has historically reacted positively. A break below these levels could trigger a deeper correction toward the €60 area. The RSI, currently at 61.6, indicates a mild healthy overbought condition, consistent with trend continuation, while the MACD remains in a positive lateral phase, showing no bearish divergence. The Point of Control (POC) of the volume profile is at €68.50, acting as dynamic support, with a secondary congestion zone around €71, where recent trading activity has concentrated. According to the ActivTrades Europe Market Pulse, market risk has normalized toward neutral levels, indicating a balance between supply and demand following the recent bullish impulse. In conclusion, ACS maintains a structurally strong bullish trend, supported by solid technical foundations and sustained buying flow. However, in the short term, it may undergo a phase of consolidation before attempting to surpass the €75 resistance, which would confirm the continuation of its long-term upward momentum. In the context of the recent Supreme Court ruling limiting deductions for prescribed fiscal years, a higher degree of accounting prudence is expected among IBEX 35 giants. This new framework could temporarily moderate margin evolution — especially in the infrastructure sector — favoring lateral or technical adjustment behavior in stocks like ACS, despite the structural strength of its primary trend. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). 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