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V1766-19 10 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Merger may qualify for special Corporation Tax regime if carried out for valid economic reasons

A parent company has enquired whether the merger of its subsidiaries can benefit from the special Corporation Tax merger regime. The DGT indicates that this is possible provided the transaction meets legal requirements and is conducted for valid economic reasons rather than purely for tax purposes.

The question raised

Whether the special tax regime regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, would be applicable to the described transaction.

The DGT's ruling

To apply the special merger regime, the transaction must comply with the provisions of Article 76.1 of the LIS and be carried out within the commercial sphere pursuant to Law 3/2009. 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 reasons of simplification, centralization, and efficiency mentioned by the taxpayer could be considered economically valid, although their classification depends on the facts.

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