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V0061-14 15 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Mergers by absorption may qualify for special Corporate Tax regime and be outside the scope of VAT and exempt from Stamp Duty

A real estate development company has enquired whether a merger with a property leasing company can qualify for the special Corporate Tax regime and what its VAT and Stamp Duty (ITPAJD) treatment would be. The Directorate General for Taxes (DGT) has ruled that the transaction qualifies for the special Corporate Tax regime due to valid economic reasons, is not subject to VAT as it constitutes an autonomous economic unit, and is exempt from Stamp Duty as it constitutes a restructuring.

The question raised

1) Whether the described operation may qualify for the special tax regime of Chapter VIII, Title VII of the Recast Text of the Corporate Income Tax Law approved by Royal Legislative Decree 4/2004, of March 5.

The DGT's ruling

The merger may qualify for the special Corporate Income Tax regime if it is carried out for commercial purposes and has valid economic reasons, without the existence of tax loss carryforwards in the absorbing company preventing its application. For VAT, the transfer is not subject to tax if the elements constitute an autonomous economic unit capable of carrying out an activity by its own means. For ITPAJD, the operation is not subject to the corporate operations modality and is exempt in the modalities of onerous transfers and documented legal acts. Article 108 of the LMV does not apply as it concerns a primary market operation.

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