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V0877-21 13 April 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Merger may qualify for special tax regime if commercial requirements and valid economic reasons are met

A solar energy company has requested clarification on whether a demerger/merger operation intended to simplify its structure can benefit from the special Corporate Income Tax regime. The Directorate-General for Taxes (DGT) indicates that the operation must comply with commercial regulations and Article 76.1.a) of the Corporate Income Tax Act, and its primary purpose must not be to obtain a tax advantage.

The question raised

Question posed: Whether the described transaction 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.

The DGT's ruling

To apply the special regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1.a) of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons such as the restructuring or rationalization of activities. Cost-saving and management simplification motives could be considered economically valid, provided that the predominant purpose of the transaction is not the exploitation of tax loss carryforwards.

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