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V2129-22 11 October 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Mergers may qualify for special regime if based on valid economic reasons rather than tax purposes

A query was raised regarding whether a merger between two entities can qualify for the special Corporate Tax regime. The DGT ruled that for this to apply, the transaction must be driven by valid economic reasons and must not have the primary objective of obtaining a tax advantage or exploiting tax loss carryforwards.

The DGT's ruling

To apply the special merger regime, the transaction must meet the requirements of Article 76.1 of the LIS and be carried out for valid economic reasons, such as the restructuring or rationalization of activities. The existence of tax loss carryforwards does not invalidate the regime if the predominant purpose of the merger is not their exploitation. If the requirements are met, the absorbing company subrogates into the right to offset the tax loss carryforwards of the absorbed company pursuant to Article 84 of the LIS.

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