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A taxpayer queried whether the merger of two entities 100% owned by a parent company could utilise the special Corporate Tax regime. The DGT ruled that this is possible provided the transaction meets commercial requirements and is carried out for valid economic reasons rather than purely for tax purposes.
Companies undertaking corporate restructurings must ensure that mergers are driven by genuine commercial objectives to qualify for special tax treatment and avoid being classified as tax avoidance schemes.
The tax team reviews your specific situation.
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