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V2494-24 ·9 December 2024 ·consulta-vinculante Medium impact
Tax

Reverse merger and improper merger between real estate companies qualify for tax neutrality under IS if valid economic reasons exist

A real estate company (Company B) proposes first merging with its parent (Company A, fully owned), followed by absorbing a wholly-owned subsidiary (Company C). The DGT confirms both transactions may benefit from the tax neutrality regime in Chapter VII, Title VII of the LIS, provided they are carried out under Royal Decree-Law 5/2023 and valid economic justifications (such as structural simplification, operational efficiency, and strengthening of real estate activities) are stated. The absorbing company does not recognise income from the cancellation of shares and assumes the tax rights and obligations of the merged entities.

In 6 key points

How it affects those involved

Companies involved in reverse and improper mergers can benefit from tax neutrality under the IS regime if valid economic grounds are provided, simplifying tax treatment and enabling smoother corporate restructuring.

Lifecycle

2024-12-09PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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