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V1053-16 16 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

The tax group is not extinguished if the dominant entity becomes a non-resident and the subsidiary undergoes a transformation

A query is made as to whether a tax group is extinguished when its dominant entity becomes a non-resident company and one of its subsidiaries transforms into a limited liability company. The DGT responds that the group is not extinguished and retains its number.

The question raised

Question posed: Whether tax group X is not extinguished, retaining its group number, with the new dominant company being entity C and the subsidiary companies being entities X (following its transformation), A, and B.

The DGT's ruling

If the dominant entity of an existing tax group becomes a non-resident entity that meets the requirements of Article 58 of the LIS, the extinction of the group does not occur and the same tax group number is preserved. In this case, the non-resident dominant entity must designate a representative entity in Spain. Likewise, the transformation of a subsidiary entity into a limited liability company does not affect its status as a subsidiary nor does it extinguish the group, provided that the participation requirements are met.

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