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V1461-18 30 May 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · sicav

Spanish SICAV merger with Luxembourg entity may qualify for special regime

A Spanish SICAV seeks advice on whether its absorption merger with a Luxembourg SICAV qualifies for the LIS special regime and whether the stated economic grounds are valid. The DGT states that the arrangement may qualify if it meets legal requirements and the economic grounds are valid.

The question raised

1. Whether the aforementioned transaction may qualify for the special tax regime of Chapter VII of Title VII of the LIS and whether the reasons set forth may be considered valid economic reasons for the purposes of the provisions of Article 89.2 of the LIS.

The DGT's ruling

The transaction may qualify for the special regime of the LIS if it is carried out within a commercial scope and complies with Article 76.1. The integration of income from the transfer of assets will depend on whether these are assigned to a permanent establishment in Spain. Reasons regarding management efficiency, cost reduction, and professionalization of the board are considered valid economic reasons pursuant to Article 89.2. The special regime is also applicable to non-resident partners if the treaty allows for the taxation of income in Spain.

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