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V1812-15 9 June 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Special regime for exchange of shares and contribution of assets applicable if legal requirements and valid economic reasons are met

A family group has enquired whether they can benefit from the special regime under the Corporate Income Tax Act to carry out an exchange of shares in their companies and a contribution of shares from another entity to a new holding company. The Directorate-General for Taxes (DGT) has ruled that this is possible provided that participation and residency requirements are met, and that reasons related to family restructuring and business management are considered economic rather than purely tax-driven.

The question raised

Question posed: Whether the described operations may qualify for the special tax regime of Chapter VII of Title VII of Corporate Income Tax Law 27/2014, of November 27.

The DGT's ruling

For the exchange of securities, the acquiring entity must obtain the majority of voting rights and comply with the residence and valuation requirements of Article 80.1 LIS. In the contribution of shares, it is required that they represent at least 5% of the equity of the contributed entity, that they be held uninterruptedly during the previous year, and that the contributor maintains at least a 5% stake in the receiving entity. The transaction shall not apply the special regime if its main objective is tax fraud or evasion, but the simplification of the structure and generational succession are considered valid economic motives.

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