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V1885-20 10 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportaciones no dinerarias

Non-cash contributions may qualify for fiscal neutrality if conditions met

Some partners inquire whether their stakes in two entities held in a holding company may benefit from the special fiscal neutrality regime. The DGT states that such regime applies if participation and residency requirements are met, and the economic justifications presented may be considered valid.

The question raised

Question posed: Whether the contributions may qualify for the tax neutrality regime regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, specifically, whether the reasons set forth may be considered valid economic reasons for the purposes of the provisions of Article 89.2 of the LIS.

The DGT's ruling

To apply the special regime for non-monetary contributions, the receiving entity must be a resident in Spain and the contributor must maintain a shareholding of at least 5% in the equity following the transaction. Furthermore, the transaction must not have the primary objective of tax fraud or evasion, but rather valid economic reasons. Reasons such as restructuring, stability in corporate governance, centralization of family management, and generational succession could be considered economically valid, although their validity depends on the verification of the facts.

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