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V0359-22 24 February 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Special merger regime applicable if valid economic reasons exist and commercial regulations are met

A company enquired whether a merger between two entities within an international group could qualify for the special merger regime under Corporate Income Tax. The DGT indicates that this is possible provided the transaction complies with the Capital Companies Act and the Corporate Income Tax Act, and that the stated economic reasons are valid and not primarily intended to achieve a tax advantage.

The question raised

Whether the merger to be carried out between entities A and B within the process of global group reorganization may qualify for the Special Merger Regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, due to the existence of valid economic reasons.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. Reasons such as structural simplification, management cost savings, and image improvement could be considered valid, although their validation depends on the facts. In the event of a merger, the acquiring entity subrogates into the tax rights and obligations of the transferring entity, including incentives such as the RIC.

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