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V0988-21 20 April 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demergers may qualify for special tax regime if LIS requirements are met and valid economic reasons exist

A query was raised regarding whether a demerger of a family company could apply the special regime for mergers and demergers and if the economic reasons are valid. The DGT indicates that if the operation meets the requirements of the LIS and the Structural Changes Act, it could qualify for the regime, provided its primary objective is not tax fraud or evasion.

The question raised

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, and whether the economic reasons are valid.

The DGT's ruling

If the transaction is carried out within the commercial sphere pursuant to Law 3/2009, it would in principle meet the conditions for total demerger under Article 76.2.1.a) of the LIS. As the partners receive shares in proportion to their previous holding, it is not necessary for the assets to constitute business lines. However, the regime shall not apply if the main objective of the transaction is tax fraud or evasion, or if it is not carried out for valid economic reasons such as the restructuring or rationalization of activities.

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