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V2117-20 24 June 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demerger of a company may qualify for special tax regime under Structural Changes Act

A consulting entity proposes a total demerger to separate assets used for economic activities from other non-business assets. The DGT rules that the operation may qualify for the special regime under the Corporate Income Tax Act, provided it meets commercial requirements and its primary purpose is not tax advantage.

The question raised

Whether the described operation 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

If the operation is carried out within the commercial sphere in accordance with Law 3/2009, it meets the requirements of Article 76.2.1ºa) of the LIS to be considered a total spin-off. As the shareholders maintain their proportionality, it is not necessary for the assets to constitute business lines. However, the application of the special regime requires that the operation's primary objective is not tax fraud or evasion, but rather valid economic reasons. Reasons such as separate management, asset integration, succession planning, or risk separation could be considered valid, although their classification depends on the facts.

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