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V0526-14 26 February 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Fusion of wholly-owned companies may qualify for special regime without title attribution

The query asks whether a merger between companies fully owned by the same shareholder can qualify for the special tax regime without attribution of representative capital values. The DGT confirms that this is possible if commercial requirements are met and the transaction has valid economic motives.

The question raised

1. Whether the application of the special regime of Chapter VIII of Title VII of the recast text of the Corporate Income Tax Law is appropriate for the described operation. In particular, whether the merger operation of companies A, B, C, D and E would be considered a merger for the purposes of Article 83.1 of the recast text of the Corporate Income Tax Law.

The DGT's ruling

In mergers between companies wholly owned by the same shareholder, it is not necessary to attribute the values of the absorbing company to the shareholder of the absorbed company to apply the special regime. As there is a single shareholder, their net worth does not change substantially and the required neutrality is met. Nevertheless, the operation must be carried out for valid economic reasons and not merely for the purpose of obtaining a tax advantage.

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