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V1807-19 11 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Merger may qualify for special regime if conducted for commercial and valid economic reasons

A company has requested a ruling on whether its merger operation can qualify for the special Corporate Tax regime and if its objectives are considered economic. The DGT indicates that both commercial and tax requirements must be met, and that the stated motives could be valid provided the facts are verified.

The question raised

Question posed: 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 for the purposes of Article 89.2 of said Law.

The DGT's ruling

To apply the special regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. 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. Reasons of administrative reorganization and centralization of activity could be considered valid, although their validity depends on the verification of the facts.

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