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V0171-22 3 February 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Requirements for special tax regime of share exchange, split and merger in Corporate Tax

An entity asks whether a series of share exchanges, partial splits and absorption mergers can benefit from the Corporate Tax special regime. The DGT states that eligibility depends on meeting voting rights majority requirements, prior business activity, and the absence of purely fiscal motives.

The question raised

1. Confirmation that the aforementioned exchange of securities operation falls within the definition provided in Article 76.5 of the Corporate Income Tax Law.

The DGT's ruling

For the exchange of securities, the acquiring entity must obtain the majority of voting rights through the allocation of new securities to the shareholders. In a partial spin-off, the segregated assets must include majority holdings and the spun-off entity must maintain a line of business with differentiated material and personal organization. A merger requires that the operation be carried out within the commercial sphere and comply with the Corporate Income Tax Law. Finally, the special regime shall not apply if the primary objective of the operation is tax fraud or evasion, or if it lacks valid economic reasons.

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