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V0467-16 8 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special tax regime if valid economic reasons exist

A consultancy firm proposes absorbing its real estate buying and selling subsidiary to cut costs and resources. The DGT examines whether the transaction qualifies as a merger for Corporate Income Tax and its impact on VAT and ITP/AJD.

The question raised

1) Whether the described transaction may qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The transaction may qualify for the special Corporate Income Tax regime if it meets the merger requirements of commercial law and is carried out for valid economic reasons, rather than for mere tax purposes. Regarding VAT, the transfer of real estate and cash does not constitute an autonomous economic unit; therefore, they shall be taxed as a mere transfer of assets. With respect to Transfer Tax/Stamp Duty (ITP/AJD), if it is a restructuring, it shall not be subject to the corporate operations modality and could be exempt.

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