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V1532-20 21 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

A merger by absorption may qualify for the special regime if valid economic reasons exist

A query is made as to whether a merger by absorption between two companies may apply the special Corporate Income Tax regime and whether the alleged reasons are valid. The DGT indicates that if the operation meets commercial and tax requirements, and is carried out for economic reasons and not solely to obtain a tax advantage, said regime may apply.

The question raised

Question raised 1. Whether the described operation 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 and whether valid economic reasons exist.

The DGT's ruling

To apply the special merger regime, the operation must be carried out in the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons such as the restructuring of activities. The existence of tax loss carryforwards does not prevent the application of the regime, provided that this is not the preponderant purpose and the activities are maintained. The absorbing company would subrogate into the tax loss carryforwards subject to the limits of Articles 84.2 and the sixteenth transitional provision of the LIS.

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