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V1700-23 13 June 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special regime if commercial and tax requirements are met

A company owning 100% of another wishes to carry out a merger by absorption and seeks guidance on whether it can apply the special Corporate Tax regime. The DGT indicates that it must comply with commercial regulations and the requirements of Article 76.1.a) of the Corporate Tax Act, provided that its primary objective is not tax advantage.

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

To apply the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with the provisions of Article 76.1.a) of the LIS. This regime shall not apply if the primary objective is fraud, evasion, or the mere obtaining of a tax advantage without valid economic reasons. The existence of valid economic reasons is a question of fact that must be assessed by the Administration according to the circumstances of each case.

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