Back to index
V1822-18 22 June 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reducción de capital

Possibility of applying participation transfer exemption and special reorganisation regime under certain conditions

Consultant companies ask whether a participation reorganisation via capital reduction and contributions to new companies can qualify for exemption under Article 21.3 and the special reorganisation regime. The DGT responds that this is possible if participation and ownership requirements are met and valid economic grounds exist.

The question raised

1. Whether the first operation may apply the exemption under Article 21.3 of the LIS.

The DGT's ruling

The exemption under Article 21.3 of the LIS is applicable in capital reductions if the requirement of a 5% significant participation and uninterrupted holding is met. For the exchange of securities and non-monetary contributions, the special regime under Chapter VII of Title VII of the LIS may be applied provided that the requirements of residence, participation percentage, and seniority are met. These operations must be carried out for valid economic reasons to avoid falling under the assumption of tax fraud or evasion under Article 89.2.

Book your free first meeting