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V0169-15 19 January 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

A partial spin-off may qualify for the special regime of the CIT if the requirements regarding lines of business and economic motives are met

The taxpayer asks whether a partial spin-off of its activities may apply the special regime of the CIT and whether its motives are valid. The DGT responds that it is possible if the segregated and the retained assets constitute autonomous lines of business and if the operation does not have the primary purpose of fraud or tax advantage.

The question raised

Whether the proposed restructuring operation could qualify for the special tax regime regulated in Chapter VII of Title VII of the Corporate Income Tax Law. And whether the economic motives can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime, the spin-off must comply with Article 76.2 of the CIT, segregating lines of business that are autonomous economic units. The transferred assets must allow for the development of an economic activity in the transferee, and the transferor must maintain another line of business or majority holdings in other entities. Likewise, pursuant to Article 89.2 of the CIT, the operation must respond to valid economic motives, such as restructuring or rationalization, and must not have the primary objective of obtaining a tax advantage.

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