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V1834-18 22 June 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

The special regime for total demergers may be applied if tax requirements are met and valid economic reasons exist

A query is made as to whether a total demerger operation of a company may qualify for the special regime of Corporate Income Tax and whether valid economic reasons exist. The DGT responds that, provided the requirements of the LIS and commercial regulations are met, the operation may qualify for the special regime, provided its primary purpose is not tax fraud or evasion.

The question raised

Question posed: Whether the described operation 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.

The DGT's ruling

For a total demerger to qualify for the special regime under Chapter VII of Title VII of the LIS, it must comply with the requirements of Article 76.2.1ºa) and, if there are several acquirers with different proportionalities, the assets must constitute business branches, unless the proportionality of the shareholders is not altered. Likewise, pursuant to Article 89.2 of the LIS, the operation must not have tax fraud or evasion as its primary objective, and must be based on valid economic reasons such as the restructuring or rationalization of activities.

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