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V1810-22 29 July 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demergers may qualify for special tax regime if LIS requirements are met and valid economic reasons exist

A query was raised regarding whether a total demerger operation can apply the special Corporate Income Tax regime. The DGT indicates that if the requirements of the LIS are met and the allocation of values is proportional, it could be applicable, provided its primary purpose is not tax fraud or tax advantage.

The DGT's ruling

For a spin-off to be considered total according to the LIS, there must be a division of the entirety of the assets and a proportional attribution of values to the partners. If the attribution is proportional, it is not necessary for the assets to constitute business lines. The special regime shall not apply if the main objective of the operation is tax fraud or evasion, or if it lacks valid economic reasons.

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