Back to index
V0698-14 13 March 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión transfronteriza

Cross-border mergers may qualify for special regime if valid economic reasons exist

A banking entity asked whether a cross-border merger could apply to the special IS regime and if its economic grounds were sufficient. The DGT responds that if the transaction meets commercial requirements and has valid economic purposes, it may qualify for such regime.

The question raised

1. Whether the proposed cross-border merger transaction could be incorporated into the special regime of Chapter VIII of Title VII of the Recast Text of the Corporate Income Tax Law and whether the economic motivation is sufficient for the purposes of Article 96.2 thereof.

The DGT's ruling

If the merger complies with the requirements of commercial law, it may benefit from the special regime of the Recast Text of the Corporate Income Tax Law. To avoid the application of Article 96.2, the transaction must be carried out for valid economic reasons and not merely for the purpose of obtaining a tax advantage. In the case presented, the reasons of structural simplification and operational efficiency are considered economically valid.

Book your free first meeting