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V0947-18 11 April 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Special spin-off regime inapplicable if segregated assets do not constitute business lines

A real estate entity inquired whether its non-proportional total spin-off could qualify for the special regime under the Corporate Income Tax Act. The Directorate General for Taxes (DGT) ruled that this is not possible because the assets do not form autonomous business lines with a distinct organisation.

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 order for a non-proportional total spin-off to access the special regime, the acquired assets must constitute business lines pursuant to Article 76.4 of the LIS. This requires each set of assets to be an autonomous economic unit with a distinct business organization. In the case analyzed, the lack of separate management and organization prevents the segregation of real estate assets from being considered a business line.

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