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V1635-19 1 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Mergers may qualify for special regime if valid economic reasons exist beyond tax advantages

The applicant asks whether the reasons for a merger by absorption are economically valid to apply the special Corporate Tax regime. The DGT indicates that the reasons presented could be valid, although this depends on the reality of the facts and on the operation not having fraud or tax evasion as its primary purpose.

The question raised

Whether the reasons for which the merger operation, through which entities B and C have been absorbed by entity A, has been proposed, are considered economically valid to implement the merger under the special tax regime of Chapter VII of Title VII of the LIS.

The DGT's ruling

To apply the special merger regime, the transaction must comply with the requirements of Law 3/2009 and Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. The existence of tax loss carryforwards in the absorbed company does not invalidate the regime if the entities are operational and the merger improves the equity position or the activity of the absorbing company. The subrogation of said carryforwards shall be carried out within the limits of Articles 84.2 and the sixteenth transitional provision of the LIS.

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