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V2043-19 7 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Operation could qualify for special merger regime if commercial requirements and valid economic motives are met

A company asks whether transferring its assets to an entity holding its entire capital may qualify for the special merger regime and whether valid economic grounds exist. The DGT states that eligibility depends on compliance with commercial law and LIS requirements, and that alleged economic motives may be valid if it is proven they do not solely aim at 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 regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1.c) of the LIS. Resident partners in Spain shall not include in their tax base the income from the attribution of values, which shall be valued at the tax value of those delivered. 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 reasons of risk separation, concentration of properties, and cost reduction could be considered valid, although their classification depends on the facts.

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