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V1793-14 9 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Partial demergers may qualify for special regime if business line and economic requirements are met

A company has enquired whether its proposed partial demerger of activities can qualify for the special regime for mergers and demergers. The Directorate General for Taxes (DGT) indicates that it must meet the definition of a business line and must not have fraud or tax advantage as its primary purpose.

The question raised

Whether the proposed restructuring operation could qualify for the special tax regime regulated in Chapter VIII of Title VII of the recast text of the Corporate Income Tax Law. And whether the economic reasons can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime, the spin-off must be carried out within the commercial sphere and comply with Article 83.2 of the TRLIS. The segregated assets must constitute an autonomous economic unit (branch of activity) that allows for the development of an economic exploitation in both the acquiring and the transferring companies. Furthermore, the operation must not have the primary objective of tax fraud or evasion, and must be based on valid economic reasons pursuant to Article 96.2 of the TRLIS.

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