Back to index
V1226-18 10 May 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Simplifying business structure and rationalising resources constitute valid economic reasons

A query was raised regarding whether a merger operation intended to concentrate assets and optimise resources within a single entity constitutes a valid economic reason. The DGT ruled that the objectives of simplification, rationalisation, and management efficiency can be considered valid economic reasons.

The question raised

Whether the restructuring operation can be considered to respond to a valid economic reason for the purposes of applying the Special regime for mergers, spin-offs, asset contributions, exchange of securities, and change of registered office of a European Company or a European Cooperative Society from one Member State to another of the European Union provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To benefit from the special merger regime, the transaction must be carried out for valid economic reasons and not solely for the purpose of obtaining a tax advantage. The simplification of the corporate structure, the concentration of assets, the optimization of resources, and the improvement of management efficiency may be considered valid economic reasons pursuant to Article 89.2 of the LIS. Notwithstanding, the application of this criterion is subject to the verification of all the circumstances of the transaction.

Book your free first meeting