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V2041-15 1 July 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Securities exchange operations may qualify for special tax regime if residency, consideration, and economic requirements are met

A query was raised regarding whether a securities exchange operation followed by the sale of shares can qualify for the special tax regime for mergers and demergers. The DGT ruled that this is possible provided that residency requirements are met, consideration is provided in shares or cash (up to a maximum of 10%), and the motives are economic in nature.

The question raised

Question posed: Whether the proposed securities exchange operation could qualify for the special tax regime regulated in Chapter VII of Title VII of the Corporate Income Tax Law. And whether the economic motives can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime for securities exchange, the acquiring entity must be a resident in Spain and the shareholders must reside in Spain or the EU. The consideration must consist of securities representing share capital and, optionally, cash not exceeding 10% of the nominal value. The motives for the operation must be valid economic motives, such as the restructuring or rationalization of activities, and must not have the primary purpose of tax fraud or evasion. In the subsequent transfer of the shares, the income shall be entitled to the exemption under Article 21 of the LIS without applying the special rule of paragraph 4.a) if deferred income is generated by the exchange.

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