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V0874-21 13 April 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Full spin-off may qualify under special regime if proportional or if entities constitute activity branches

A car dealership company asks whether its plan to split into three separate companies can use the special tax regime for IS. The DGT examines two scenarios: one with non-proportional distribution and one with proportional distribution.

The question raised

Whether the described operation could qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

In a non-proportional total spin-off, it is a requirement that the segregated assets constitute business lines, i.e., autonomous economic units capable of operating by their own means. If the distribution is proportional, it is not required that the assets be business lines to apply the special regime. For Personal Income Tax (IRPF), if the special regime is applied, the partners shall not recognize income and the new holdings shall maintain the original values and acquisition dates. For VAT, the transaction shall not be subject to tax if an autonomous economic unit is transferred at the registered office of the transferor.

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