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V0931-14 2 April 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Special merger regime applicable if valid economic reasons exist beyond mere tax advantages

A company queried whether a merger between two operating companies could qualify for the special Corporate Tax regime. The DGT ruled that this is possible provided the transaction meets commercial requirements and aims for economic restructuring rather than solely exploiting tax loss carryforwards.

The question raised

Whether the application of the special regime under Chapter VIII of Title VII of the consolidated text of the Corporate Income Tax Law is appropriate for both the shareholders and the entities involved regarding the proposed transaction, and whether the alleged motives are considered economically valid for these purposes.

The DGT's ruling

To benefit from the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 83.1 of the TRLIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons. The fact that the companies have negative tax bases does not invalidate the regime if they are operating companies and the merger seeks the rationalization of activities. The offsetting of said bases shall be subject to the limits of Articles 90 and DT 41 of the TRLIS.

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