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V0791-14 24 March 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRNR · ganancia patrimonial

Luxembourg merger may qualify for special reorganisation regime if valid economic reasons exist

An Italian company plans to absorb a Luxembourg-based entity, which in turn holds a Spanish company whose assets are real estate. The consultation examines whether the Luxembourg entity's capital gain is taxable in Spain and whether the special merger regime applies.

The question raised

Question posed: Whether the Spanish reorganization regime would be applicable to the proposed merger.

The DGT's ruling

The capital gain of the Luxembourg entity from the transfer of shares in the Spanish company is subject to Non-Resident Income Tax (IRNR), as the assets of the Spanish company are primarily real estate in Spain. The exemption under non-resident regulations does not apply due to the nature of the asset. The transaction may qualify for the special merger regime of the TRLIS if it is carried out under European regimes and responds to valid economic reasons, rather than a merely tax-driven purpose.

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