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V1149-16 22 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · rama de actividad

Property activity contribution may qualify for LIS special regime

A taxpayer asks whether the contribution of their commercial property leasing activity can use the LIS special regime. The DGT states that it may apply if the entity forms an autonomous economic unit, provided accounting requirements and valid economic reasons are met.

The question raised

Whether the described operation could qualify for the 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

The contribution of a line of business may qualify for the special regime if the segregated assets allow for the development of an autonomous economic undertaking. In this case, the set of contributed elements constitutes a line of business as it possesses human and material resources. For it to be applicable, the taxpayer must maintain accounting records in accordance with the Commercial Code and the operation must not have the primary objective of tax fraud or evasion. The motive of simplifying future transfers to children does not preclude the regime, provided there are reasons evidencing an improvement in the economic structure or a rationalization of activities.

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