Skip to content
Back to index
V0804-24 19 April 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Tax neutrality regime may apply to total demergers if LIS requirements are met

A consulting company proposes a total demerger to create three new entities in which its partners will participate proportionally. The DGT indicates that, if the operation meets commercial and LIS requirements, it could benefit from the special tax neutrality regime.

The question raised

Whether the total proportional spin-off of the consulting entity A, involving the creation of three new entities (NEWCO1, NEWCO2 and NEWCO3), may benefit from the tax neutrality regime set forth in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

If the spin-off is carried out within the commercial scope pursuant to Royal Decree-Law 5/2023 and the shareholders receive shares in the new entities in proportion to their previous holding, it is not necessary for the assets to constitute business lines. However, the neutrality regime shall not apply if the primary objective of the operation is fraud, evasion, or the mere obtaining of a tax advantage without valid economic reasons.

Book your free first meeting