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V1608-20 26 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Non-monetary contributions may qualify under special LIS regime if valid economic reasons exist

The consultant asks whether a 50% share transfer to another company can benefit from the special LIS regime. The DGT states that if participation and ownership requirements are met, the transaction may qualify under this regime provided that valid economic grounds are given and the main objective is not tax advantage.

The question raised

Question posed: Whether the motivation presented responds to a valid economic reason and, therefore, whether the contribution may qualify for the special tax regime established in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

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, and the contributor must maintain a stake of at least 5% in the entity's equity following the transaction. Furthermore, the contribution of shares must comply with requirements of uninterrupted ownership during the previous year and the entity may not have the management of movable or immovable property as its primary activity. Finally, the transaction must not have the primary objective of tax fraud or evasion, and must be based on valid economic reasons rather than the mere pursuit of a tax advantage.

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