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V0152-21 2 February 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión inversa

Reverse mergers may qualify for special Corporate Tax regime if commercial requirements and valid economic reasons are met

A company has enquired whether a reverse merger between entity A (the absorbing entity) and entity B (the absorbed entity) can benefit from tax deferral. The DGT indicates that, provided the transaction complies with commercial regulations and Article 76.1.a) of the Corporate Tax Act, it could qualify for the special regime, provided there are valid economic reasons and the purpose is not to obtain a tax advantage.

The question raised

Whether it is correct to state that the deferral regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax is applicable to the restructuring operation consisting of the reverse merger between entity A (absorbing company) and entity B (absorbed company) under the terms set forth in the body of the query and that the economic reasons provided are valid, in order to justify its application.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1.a) of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons such as the restructuring or rationalization of activities. The alleged economic reasons could be considered valid, although their application will depend on the assessment of the facts and on the condition that the purpose is not the predominant exploitation of tax loss carryforwards.

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