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V1461-22 21 June 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Mergers by absorption may qualify for special regime if carried out under Law 3/2009 with valid economic reasons

A query was raised regarding whether a merger by absorption between two entities can apply the special merger regime under the Corporate Income Tax Act (LIS). The Directorate General for Taxes (DGT) ruled that to qualify, the merger must meet the commercial requirements of Law 3/2009, the requirements of Article 76.1 of the LIS, and must not have tax fraud or evasion as its primary purpose.

The question raised

Whether the merger by absorption transaction described complies with all legal requirements, including the valid economic reason and, therefore, whether the special regime for mergers, demergers, 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, as provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, may be applicable.

The DGT's ruling

To apply the special regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with the provisions of Article 76.1 of the LIS. Furthermore, pursuant to Article 89.2 of the LIS, the transaction must not have tax fraud or evasion as its primary objective, and must be based on valid economic reasons such as the restructuring or rationalization of activities. Reasons of management simplification and optimization of physical resources could be considered economically valid, although their final classification depends on the facts and circumstances of each case.

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