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V2046-18 11 July 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Special merger regime may apply if the transaction has valid economic reasons

A group of companies has enquired whether their proposed merger by absorption meets the requirements to benefit from the special tax regime. The Directorate General of Taxes (DGT) has ruled that if the transaction complies with commercial regulations and its primary purpose is not tax advantage, the regime may be applied.

The question raised

Question posed: Possibility that the projected merger by absorption transaction complies with all legally provided requirements to benefit from the special tax regime regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, and in particular, to the figure provided for in Article 76.1.a) of said legal body, as a merger transaction.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1.a) of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if it lacks valid economic reasons. Reasons of organizational simplification and cost savings may be considered economic, and the existence of negative tax bases does not in itself invalidate the application of the regime.

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