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V1548-22 28 June 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demergers may qualify for special tax regime if LIS and structural modification requirements are met

A language teaching company has enquired whether its total demerger into five companies can benefit from the special Corporate Tax regime. The DGT indicates that, provided commercial regulations are met, the regime could apply as long as shareholders maintain proportionality and valid economic reasons exist.

The question raised

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 and whether valid economic reasons exist.

The DGT's ruling

If the transaction is carried out within the commercial scope pursuant to Law 3/2009 and the partners receive shares in the beneficiary entities in proportion to their current holding, the application of the special regime does not require the spun-off assets to constitute business lines. However, to apply this regime, the transaction must not have the primary objective of tax fraud or evasion, but must instead respond to valid economic reasons. Reasons such as asset protection or facilitating the entry of partners could be valid, although their classification depends on the specific facts.

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