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V1784-14 8 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Partial demergers may qualify for special Corporate Tax regime if distinct business lines are transferred

The applicant inquired whether the demerger of its real estate leasing activity into a new company could qualify for the special Corporate Tax regime. The DGT ruled that this is possible provided the segregated assets constitute an autonomous business line and the transaction is driven by valid economic reasons.

The question raised

Whether the proposed restructuring operation could qualify for the special tax regime regulated in Chapter VIII of Title VII of the consolidated text of the Corporate Income Tax Law.

The DGT's ruling

To apply the special spin-off regime, the transferred assets must constitute a business line, understood as a set of elements capable of functioning by its own means and with a distinct business organization. It is not necessary to apply the economic activity criteria of the Personal Income Tax, but rather to analyze whether an autonomous exploitation exists. Furthermore, the operation must be carried out for valid economic reasons and not with the primary objective of tax fraud or evasion.

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