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V1907-19 19 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reorganización empresarial

Reasons of generational succession and consolidation of family control could be considered valid economic grounds

A query was raised regarding whether business reorganisations aimed at facilitating generational succession and avoiding inheritance disputes constitute valid economic grounds. The DGT indicates that such reasons could be considered valid for applying the special regime for mergers and demergers.

The question raised

It is asked whether the reorganization motives described can be considered economically valid motives for the purposes of applying the special tax regime provided for 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 operation must not have fraud or tax evasion as its primary objective, nor be carried out without valid economic reasons. The objectives of organizing generational succession, concentrating family interests, maintaining the distribution of power, and avoiding the fragmentation of holdings due to succession could be considered valid economic reasons. However, the validity of these reasons depends on the verification of the actual facts and circumstances of the operation.

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