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V0850-18 26 March 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportaciones no dinerarias

Tax neutrality regime may apply to non-monetary contributions if valid economic reasons exist

A taxpayer inquired whether contributing shares in various companies to a new family holding company could qualify for the special tax neutrality regime. The Directorate General of Taxes (DGT) ruled that this is possible provided that the requirements for participation and ownership are met, and that reasons such as family restructuring and liquidity management are considered valid economic grounds.

The question raised

Question posed: Whether the reasons presented are valid for the purpose of subjecting the described operation to the tax neutrality regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the regime for non-monetary contributions under Article 87 of the LIS, it is required that the receiving entity be a resident in Spain, that the contributor maintains at least 5% of the entity's equity, and that the shares have been held uninterruptedly during the previous year. Furthermore, pursuant to Article 89.2 of the LIS, the operation must not have the primary purpose of tax fraud or evasion, but must instead respond to valid economic reasons. Reasons such as the concentration of family wealth to avoid conflicts, facilitate succession, or channel liquidity surpluses for new projects may be considered valid.

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