Back to index
V0856-20 14 April 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

A total demerger may qualify for the special regime if the requirements of the CIT Act are met and valid economic reasons exist

A query is made as to whether a total demerger of an entity into two new companies may apply the special regime of the CIT Act and whether the reasons provided are valid. The DGT indicates that, provided that commercial regulations and the proportionality of shareholdings are met, the regime could be applied, provided it is not for the purpose of tax fraud or evasion.

The question raised

Question posed: Whether the described operation 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 valid economic reasons exist.

The DGT's ruling

For a total demerger to qualify for the special regime under Chapter VII of Title VII of the CIT Act, it must meet the requirements of article 76.2.1º a) of said law. If proportionality is maintained in the allocation of values to the partners, it is not necessary for the assets to constitute business lines. Furthermore, the operation must not have tax fraud or evasion as its primary objective, and must be based on valid economic reasons pursuant to article 89.2 of the CIT Act. Reasons such as the simplification of succession or generational renewal could be considered valid, although their classification depends on the specific facts.

Email
Contact