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V0290-21 18 February 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demergers may qualify for special Corporate Tax regime if LIS requirements and valid economic reasons are met

A single-member professional company has enquired whether its total demerger can qualify for the special Corporate Tax regime and if its underlying reasons are valid. The DGT indicates that, provided commercial law requirements are met, the regime could apply, provided it is not used for tax fraud or evasion.

The question raised

Question raised 1. Whether the described transaction can benefit from the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax and whether valid economic reasons exist.

The DGT's ruling

If the transaction is carried out under Article 69 of Law 3/2009, it would meet the requirements for total demerger under Article 76.2.1º a) of the LIS. As there is a single shareholder, it is not required that the assets constitute business lines. However, the application of the special regime requires that the transaction's primary objective is not tax fraud or evasion, but rather valid economic reasons. Restructuring motives to allow the entry of new shareholders could be considered valid, although this depends on the facts.

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