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V1898-21 17 June 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

A merger by absorption may qualify for the special regime if carried out for valid economic reasons

A query is made as to whether the merger of a leasing company into another family entity may apply the special Corporate Income Tax regime and whether valid economic reasons exist. The DGT indicates that the transaction may qualify for the regime if it meets commercial and tax requirements, provided that its primary purpose is not tax advantage.

The question raised

Question posed: Whether the described transaction 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

To apply the special merger regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons. The existence of tax loss carryforwards does not prevent the application of the regime, provided that this is not the preponderant purpose and the activities are maintained. Reasons such as cost reduction or resource optimization could be considered valid, although their assessment depends on the facts.

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