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V1701-20 29 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportaciones no dinerarias

Contributions of shares may qualify for special IS regime if ownership and economic motives are met

Individuals inquire whether share contributions to a company can use the special IS regime and if their economic motives are valid. The DGT states that minimum ownership and holding requirements can be met, and the alleged motives may be valid depending on the facts.

The question raised

1. Whether the contribution of the interest in E to entity B may qualify for the special tax regime regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, and whether the economic motives may be considered valid for the purposes of applying the special regime.

The DGT's ruling

To apply the special regime for non-monetary contributions in Corporate Income Tax, it must be met that the receiving entity is a resident or has a permanent establishment, that the contributor maintains at least 5% of the recipient's equity, and that the holdings represent at least 5% of the contributed entity's equity, having been held uninterruptedly during the previous year. Furthermore, the operation must not have fraud or tax evasion as its primary objective, but rather valid economic motives. Motives of rationalization, efficient management, and generational succession could be considered valid, but their validation is a matter of fact.

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