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V1533-20 21 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Non-cash contributions may apply under special merger regime if conditions met

A natural person enquires whether transferring shares from a company to a new holding company qualifies for the special merger regime. The DGT states that this is possible if participation and ownership requirements are met and the transaction has valid economic motives.

The question raised

Question raised 1. Whether the criteria described above would lead to the application of the special regime for mergers, demergers, contributions of assets, exchange of securities, and change of registered office of a European Company or a European Cooperative Society from one Member State to another within the European Union, regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, to the described transaction.

The DGT's ruling

To apply the special regime for non-monetary contributions, the recipient entity must be a resident in Spain or have a permanent establishment. The contributor must have held the shares uninterruptedly during the previous year and maintain at least 5% of the recipient entity's equity following the transaction. Furthermore, the transaction must respond to valid economic reasons and not have the primary objective of obtaining a tax advantage. Reasons of reorganization, wealth management, or hereditary succession could be considered valid, although their classification depends on the facts.

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