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V1079-16 17 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Special share exchange regime may apply if the transaction has valid economic reasons

A query was raised regarding whether an acquisition of shares intended to create a business group could qualify for the special share exchange regime. The Directorate General for Taxes (DGT) ruled that the transaction fits this definition. Provided that residency requirements and valid economic reasons are met, no income will be recognised for Personal Income Tax (IRPF) or Corporate Tax (IS) purposes, and the transaction will be exempt from Transfer Tax and Stamp Duty (ITPAJD).

The question raised

Question raised: Whether it is possible to apply to the described operation the special regime established for non-monetary contributions in Article 87 of Law 27/2014, of November 27, on Corporate Income Tax, in relation to Personal Income Tax, Corporate Income Tax, Value Added Tax, and Transfer Tax and Stamp Duty.

The DGT's ruling

The described operation is considered a share exchange pursuant to Article 76.5 of the LIS. To apply the special regime and avoid the inclusion of income in the Personal Income Tax (IRPF) or Corporate Income Tax (IS), the residency requirements for the shareholders and the acquiring entity must be met (Art. 80 LIS). Furthermore, the operation must correspond to valid economic reasons, such as the restructuring of activities, and must not have the primary purpose of fraud or tax advantage (Art. 89.2 LIS). Regarding the ITPAJD, if it is a restructuring, it shall neither be subject to nor exempt from the various modalities of the tax.

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