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V1337-18 22 May 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special Corporate Tax regime if commercial and tax requirements are met

A holiday rental company has enquired whether its merger by absorption can qualify for the special Corporate Tax regime and if valid economic reasons exist. The DGT indicates that if the transaction complies with commercial regulations and Article 76.1 of the Corporate Tax Act, it may apply said regime provided its primary purpose is not tax fraud or tax advantage.

The question raised

Question posed: Whether the described transaction may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax and whether valid economic reasons exist.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. Furthermore, its primary objective must not be tax fraud or evasion, but rather respond to valid economic reasons such as the restructuring or rationalization of activities. The objectives of obtaining synergies and reducing administrative costs may be considered valid economic reasons pursuant to Article 89.2 of the LIS.

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