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V1355-20 12 May 2020 · SG de Tributos Locales Criterion in force
OTRO · impuesto sobre actividades económicas

Exemption for start of activity not transferable in merger if absorbing entity already carries out the activity

A company asked whether it could benefit from the IAE start-of-activity exemption after absorbing a subsidiary. The DGT replied that the exemption does not apply if the absorbing entity already carries out the activity, but may apply if it is a new activity for the entity.

The question raised

Whether, in the event of a merger, the right held by the absorbed subsidiary to apply the exemption in the year 2020 due to the commencement of activity is inherited or transferred to the consulting entity as the absorber thereof.

The DGT's ruling

The exemption under Article 82.1.b) of the TRLRHL applies to the commencement of a fiscal year for an activity that has not been previously carried out under a different ownership, including cases of merger. If the absorbing entity already carries out the same economic activity as the subsidiary, it is not considered a commencement of activity for said entity. However, if the absorbing entity carries out a different activity, it would be entitled to apply the exemption pending from the absorbed subsidiary, as it constitutes a new activity for the entity.

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