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V1808-20 8 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special regime if commercial requirements are met and valid economic reasons exist

A holding company has requested a ruling on whether its merger by absorption of two companies can apply the special merger regime and if valid economic reasons exist. The DGT indicates that the operation may qualify for this regime if carried out under the Structural Changes Act and complies with Article 76.1 of the Corporate Income Tax Act, provided its primary purpose is not tax advantage.

The question raised

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 motives exist.

The DGT's ruling

To apply the special merger 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 motives of management simplification and solvency improvement could be considered economically valid, provided that the transaction does not have the predominant purpose of utilizing tax loss carryforwards. The existence of tax loss carryforwards does not invalidate the regime if the activities are maintained and the limits of Articles 84 and the sixteenth transitional provision of the LIS are respected.

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