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V1974-19 29 July 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Non-monetary contributions may qualify under LIS special regime

The consultant asks whether contributions of shares in one entity to another may qualify for the LIS special regime and whether valid economic grounds exist. The DGT states that the regime applies if participation and ownership requirements are met, and that the alleged economic reasons may be valid if the facts are substantiated.

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 regime for non-monetary contributions, the receiving entity must be a resident in Spain or have a permanent establishment, and the contributor must maintain a shareholding of at least 5% in the equity of the receiving entity. In the case of shares or holdings, these must represent at least 5% of the equity of the contributed entity, must have been held uninterruptedly during the previous year, and the entity cannot be an economic interest group nor have wealth management as its primary activity. The economic reasons alleged for the transaction could be considered valid pursuant to Article 89.2 of the LIS, although their validity depends on the verification of the facts.

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