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V1853-19 16 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

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

The taxpayer queried whether a merger by absorption could qualify for the special merger regime. The DGT ruled that this is possible provided that commercial regulations and Article 76.1.a) of the Corporate Income Tax Act are satisfied, and that the transaction is driven by valid economic reasons rather than tax fraud or evasion.

The question raised

1.- Whether the proposed merger by absorption could qualify for the special regime for mergers, demergers, asset contributions, and exchange of securities regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1.a) of the LIS. The prior transformation of the absorbing company into an SL nor the ownership of a non-affected real estate property affects this. The existence of negative tax bases does not invalidate the regime if the transaction has valid economic reasons and does not seek mere tax advantage. The absorbing company shall be subrogated into the negative tax bases within the limits of Articles 84.2 and the sixteenth transitional provision.7.b) of the LIS.

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