Back to index
V1879-14 14 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Special merger regime applicable if operation is driven by valid economic reasons

A dominant company has enquired whether a merger-based reorganization can qualify for the special regime under the Corporate Income Tax Law. The Directorate General for Taxes (DGT) indicates that this is possible provided the operation meets commercial and tax requirements, and is carried out for valid economic reasons rather than purely for tax purposes.

The question raised

Confirmation of the application of the regime established in Chapter VIII, Title VII of the Recast Text of the Corporate Income Tax Law to the proposed reorganization.

The DGT's ruling

To qualify for the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 83.1 of the TRLIS. The application of the regime requires that the transaction's primary objective is not tax fraud or evasion, and it must respond to valid economic motives such as the restructuring or rationalization of activities. The existence of tax loss carryforwards or inactive companies does not in itself invalidate the regime if the purpose is not the exploitation of said losses. The acquiring entity subrogates into the right to offset the tax loss carryforwards of the transferor within the limits of Articles 90.3 and the forty-first transitional provision of the TRLIS.

Book your free first meeting