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V1605-20 26 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

The taxpayer asks whether a merger by absorption between two companies can apply the special merger regime and if the alleged reasons are valid. The DGT indicates that the operation could qualify for the regime if it meets commercial and tax requirements, provided that its primary purpose is not tax advantage.

The question raised

Question posed: Whether the described operations can 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 reasons of cost simplification and resource optimization could be considered valid economic reasons, although this is a matter of fact. The existence of tax loss carryforwards does not prevent the regime, provided that it is not the preponderant purpose of the operation and the activities are maintained. The offsetting of such losses in the absorbing company shall be subject to the limits of Articles 84 and the 16th Additional Provision of the LIS.

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