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V1518-17 14 June 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Special regime for exchange of shares and contribution of assets may apply if legal requirements are met

A taxpayer inquired whether contributing shares from two different entities to a new holding company could qualify for the special regime under the Corporate Income Tax Act. The Directorate General for Taxes (DGT) ruled that this is possible, provided that requirements regarding voting rights majorities, minimum shareholding, and uninterrupted ownership are met, and that valid economic reasons exist.

The question raised

Question posed: Whether the described transaction may qualify for the 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

For the exchange of securities, the beneficiary entity must acquire shares that allow it to obtain the majority of voting rights and comply with Article 80 of the LIS. In the contribution of shares by natural persons, these must represent at least 5% of the equity of the receiving entity, must have been held uninterruptedly for one year, and the contributor must maintain a minimum stake of 5% in the entity following the transaction. Finally, the transaction must not have the primary objective of tax fraud or evasion, and must correspond to valid economic reasons.

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