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V0763-21 30 March 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger between entities may qualify for special regime if commercial and economic requirements are met

A query was raised regarding whether a merger by absorption between two entities can apply the special regime under the Corporate Income Tax Act (LIS) and if its underlying motives are valid. The Directorate General for Taxes (DGT) indicates that it must comply with commercial regulations and Article 76.1 of the LIS, and its primary purpose must not be to obtain a tax advantage.

The question raised

Whether the described transaction 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, and whether the economic motives are valid.

The DGT's ruling

To apply the special regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. Profitability and organizational rationalization motives could be considered valid, although this depends on the facts and circumstances of each case.

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