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V0166-15 19 January 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Partial spin-off regime applicable if a business line is transferred and valid economic reasons exist

The consultant asks whether their plan to partially spin off into software development qualifies for the special corporate tax regime. The DGT responds that it is possible if the separated part constitutes an autonomous business line and the operation is not primarily aimed at tax benefits.

The question raised

Whether the proposed partial spin-off is eligible to benefit from the special regime established in Chapter VII of Title VII of Law 27/2014 on Corporate Income Tax, as it is an operation carried out due to the need for specialization and national and international expansion of the beneficiary company and not with the intention of obtaining a tax advantage.

The DGT's ruling

To qualify for the special regime, the spin-off must comply with commercial and tax requirements, segregating a line of business that constitutes an autonomous economic unit capable of operating by its own means. Likewise, the operation must be carried out for valid economic reasons, such as the restructuring or rationalization of activities, and not with the primary objective of obtaining a tax advantage. The existence of a line of business requires a differentiated business organization within the transferring entity.

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