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V0933-15 25 March 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Fusion by absorption cannot benefit from special tax regime if primarily aimed at tax loss offset

A company asks whether a merger by absorption of a fully owned entity can qualify for the special tax regime. The DGT states that it does not apply if the transaction lacks valid economic motives and is primarily intended to offset negative taxable bases of the absorbed entity.

The question raised

1) Whether the described transaction may qualify for the special tax regime under Chapter VII of Title VII of Corporate Income Tax Law 27/2014, of November 27.

The DGT's ruling

To apply the special merger regime, the transaction must respond to valid economic reasons and not have the primary objective of tax fraud or evasion. In this case, as there is no true reorganization of activities due to the inactivity of the absorbed company and no improvement in the asset structure, the existence of pending negative tax bases to be offset prevents the use of the special regime as it would constitute a tax advantage.

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