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V1505-22 23 June 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special regime if valid economic reasons exist

A company has consulted whether the merger by absorption of its subsidiary can apply the special tax regime under the Corporate Income Tax Act. The DGT indicates that this is possible provided the transaction meets commercial and tax requirements and its primary purpose is not tax advantage.

The question raised

Whether the described transaction 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.

The DGT's ruling

The transaction may qualify for the special regime if it is carried out within a commercial scope pursuant to Law 3/2009 and complies with Article 76.1 of the LIS. It shall not be applicable if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons pursuant to Article 89.2 of the LIS. The existence of negative tax bases does not prevent the regime, provided that it is not the preponderant purpose of the merger and the compensation limits of Article 84 of the LIS are respected.

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