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V0324-24 5 March 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Absorption merger may qualify for tax neutrality if valid economic reasons exist

A holding company proposes an absorption merger of its subsidiaries to rationalise its real estate structure and settle one of their debts. The DGT states that the transaction may apply the tax neutrality regime if it meets LIS requirements and is driven by economic reasons, not fraud or tax advantage.

The DGT's ruling

Merger by absorption may qualify for the tax neutrality regime under the LIS if carried out for commercial purposes and complying with Article 76.1. The application of this regime requires that the primary objective of the operation is not tax advantage, but rather valid economic reasons. The negative tax bases of the absorbed company may be offset in the absorbing company pursuant to Article 84 of the LIS. Regarding the forgiveness of debt between related parties, the accounting treatment according to NRV 18 of the PGC implies that the debtor recognizes income that may benefit from the exemption under Article 21 of the LIS. In terms of ITP and AJD, the restructuring operation is not subject to the corporate operations modality and is exempt in the other modalities.

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