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V1404-20 13 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demergers may qualify for special Corporate Tax regime if legal and economic requirements are met

A transport company with real estate assets seeks clarification on whether its total demerger into two new companies can benefit from the special Corporate Tax regime and its impact on other taxes. The Directorate-General for Taxes (DGT) indicates that the operation could meet the requirements for Corporate Tax and Transfer Tax/Stamp Duty (ITP/AJD), although the application of VAT exemption and the non-accrual of Property Transfer Tax (IIVTNU) will depend on specific circumstances.

The question raised

Question posed: Whether the restructuring operation proposed in the consultation request may qualify for the special 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 motives exist.

The DGT's ruling

For Corporate Income Tax, the total spin-off may qualify for the special regime if carried out under the terms of the Law on Structural Modifications and proportionality in the allocation of shares is maintained. The economic motives presented could be valid, although their classification is a matter of fact. For VAT, non-liability requires that the transferred elements constitute an autonomous economic unit. For Transfer Tax and Stamp Duty, the operation is a restructuring that entails non-liability and exemption. For Real Estate Wealth Tax, non-accrual is conditional upon the circumstances of the second additional provision of the Corporate Income Tax Law occurring.

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