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V2063-14 28 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · rama de actividad

Contribution of a line of business may qualify for special regime if it constitutes an autonomous economic unit and valid economic reasons exist

An individual has enquired whether the contribution of their real estate leasing activity to a company may qualify for the special Corporate Income Tax regime and if the stated reasons are valid. The DGT indicates that it could qualify if the activity constitutes an autonomous economic unit and the reasons are economic rather than merely tax-driven.

The question raised

Question posed: Whether the application of the special regime of Chapter VIII of Title VII of the consolidated text of the Corporate Tax Law is appropriate for the proposed operation, and whether the alleged reasons are considered economically valid for these purposes.

The DGT's ruling

The contribution of a branch of activity from an IRPF taxpayer may qualify for the special regime of the TRLIS if it constitutes an autonomous economic unit capable of operating by its own means. The contributed assets may not be valued at a price higher than market value. To avoid the general regime, the operation must respond to valid economic reasons and not have fraud or tax evasion as its primary objective. Regarding ITP and AJD, restructuring operations classified under the TRLIS are not subject to the corporate operations modality and are exempt under the onerous transfers and documented legal acts modalities.

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