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V0893-14 1 April 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Partial spin-off may qualify for IS special regime if activity branches and economic motives are valid

The consultant asks whether a partial spin-off of its storage and services activities can apply for the IS special regime and whether the economic motives are valid. The DGT responds that this is possible if the activities constitute autonomous activity branches and the economic motives are valid and not merely fiscal.

The question raised

Whether the proposed restructuring operation could qualify for the special tax regime regulated in Chapter VIII of Title VII of the consolidated text of the Corporate Income Tax Law. And whether the economic reasons can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime, the spin-off must comply with Article 83.2 of the TRLIS and constitute business lines pursuant to Article 83.4, which requires a distinct and autonomous business organization for each asset group. Furthermore, the operation must not have the primary objective of tax fraud or evasion, and must be based on valid economic reasons according to Article 96.2 of the TRLIS. The existence of business lines and the absence of merely fiscal purposes are matters of fact that the taxpayer must prove.

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