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V0600-22 22 March 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Mergers by absorption may qualify for special Corporate Tax regime if valid economic reasons exist

Three entities plan a merger by absorption to simplify their structure and reduce costs. The Directorate General for Tax (DGT) examines whether the operation qualifies for the special Corporate Tax regime, non-liability for Stamp Duty (ITPAJD), VAT exemption, and the accrual of Wealth Tax (IIVTNU).

The question raised

Question raised 1. If the described operation may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, given the existence of valid economic reasons.

The DGT's ruling

The merger may qualify for the special Corporate Income Tax regime if it is carried out for commercial purposes and complies with Article 76.1 of the Corporate Income Tax Law with valid economic reasons. Regarding the Personal Income Tax on Activities and Income (ITPAJD), the transaction is not subject to the corporate operations modality and is exempt in the other modalities. With respect to VAT, the transfer would not be subject to tax if the absorbed companies do not hold the status of entrepreneur or professional due to the mere holding of real estate. The non-accrual of the Real Estate Transfer Tax (IIVTNU) will depend on whether the circumstances of the second additional provision of the Corporate Income Tax Law are met.

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