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V2046-19 7 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Share contribution to a society may qualify for special IS regime if participation and economic motives are met

A natural person enquires whether a 25% share contribution to a Spanish resident holding society may apply for the special IS regime and whether valid economic motives exist. The DGT responds that the special regime applies if participation and ownership requirements are met, and that the alleged economic motives could be valid depending on the facts.

The question raised

Question raised 1. 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 in Corporate Income Tax, the receiving entity must be a resident in Spain and the contributor must hold at least 5% of its equity. In the case of natural persons, the holdings must represent at least 5% of the equity and must have been held uninterruptedly during the previous year. The transaction must not have the primary objective of tax fraud or evasion, but rather valid economic reasons. Regarding VAT, the transfer is not subject to tax if the contributor is not an entrepreneur or professional. In Transfer Tax and Stamp Duty, the transaction is an exempt restructuring, and as it is a primary market transaction, the anti-avoidance rule for the transfer of real estate does not apply.

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