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V1950-15 19 June 2015 · 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 valid economic reasons exist

A company inquires whether the merger of three entities to optimize management and reduce costs may apply the special tax regime. The DGT responds that the alleged reasons are economically valid and allow for the use of said regime.

The question raised

Question posed: Whether the reasons for which the proposed operation is intended to be carried out are valid economic reasons and whether the operation may qualify for the special tax regime under Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special merger regime, the operation 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 there are no valid economic reasons such as the restructuring or rationalization of activities. The existence of pending tax loss carryforwards in the absorbing company does not in itself invalidate the regime if the entities are operational and the purpose is not the exploitation of said tax losses.

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