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V0193-14 28 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusión

Special merger regime applicable if valid economic reasons exist and no tax fraud is present

A company has requested clarification on whether the merger of its subsidiary can qualify for the special Corporate Tax regime. The DGT has ruled that this is possible provided the transaction meets commercial requirements and is supported by valid economic reasons, although there are limitations regarding the offsetting of negative tax bases related to previous impairments.

The question raised

1. Whether the special regime of Chapter VIII of Title VII of the consolidated text of the Corporate Income Tax Law shall apply to the aforementioned merger.

The DGT's ruling

The transaction may qualify for the special regime if it meets the merger requirements of commercial law and aims at the restructuring or rationalization of activities for valid economic reasons. However, the regime shall not apply if the primary objective is tax fraud or evasion. Regarding negative tax bases, those that motivated the depreciation of the entity's equity interest in periods starting before 2013 shall not be offset, pursuant to the forty-first transitional provision of the TRLIS.

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