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V1061-16 16 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Special split-up regime cannot be applied without distinct lines of business

A company inquired whether its split-up operation could qualify for the special regime under Corporate Income Tax. The DGT ruled that it cannot, as the exploitation and leasing of estates constitutes a single economic activity rather than several autonomous lines of business.

The question raised

Whether the described operation may qualify for the tax regime established in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special spin-off regime, the segregated assets must constitute branches of activity that are autonomous economic units with differentiated material and personnel organization prior to the operation. The mere fact of having different employees does not guarantee the existence of differentiated branches if the activity is unique and possesses a single business organization. In this case, the exploitation and leasing of estates is considered a single economic activity, which prevents the use of the special regime.

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