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V0229-24 29 February 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total no proporcional

For a non-proportional total demerger to be tax-neutral, assets must constitute business lines

A company has requested a ruling on whether segregating its two activities (carpentry/locksmithing and flooring manufacturing) into two new entities constitutes a non-proportional total demerger under the tax neutrality regime. The DGT ruled that to apply this regime, the segregated assets must constitute business lines, meaning autonomous economic units capable of operating independently.

The question raised

1. Whether the described activities constitute business lines pursuant to Article 76.4 of the LIS.

The DGT's ruling

In a non-proportional total spin-off, the spun-off assets must constitute business lines, understood as sets of assets that form an autonomous economic unit capable of operating by its own means. This requires that the activity previously exists within the transferring entity with a distinct business organization (specific material and human resources) that determines autonomous economic operations. Furthermore, the operation must not have as its primary objective the obtaining of a tax advantage without valid economic reasons.

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