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V0365-18 9 February 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Merger of two companies may qualify for special regime if valid economic reasons exist

A query was raised regarding whether a merger by absorption of company B by company A, both under tax consolidation, meets the requirements of the special merger regime. The DGT indicates that if the operation complies with commercial regulations and Article 76.1.a) of the LIS, and serves valid economic purposes, said regime may apply.

The question raised

Whether the described merger transaction meets the requirements to benefit from the special regime established in Chapter VII of Title VII, Articles 76 to 89, of Law 27/2014, of November 27, on Corporate Income Tax (Articles 76.1 and 89.2).

The DGT's ruling

To benefit from 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.a) of the LIS. Furthermore, its primary objective must not be tax fraud or evasion, requiring valid economic reasons such as the restructuring or rationalization of activities. In this case, the intention to concentrate activity to reduce costs and increase competitiveness may be considered a valid reason pursuant to Article 89.2 of the LIS.

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