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V2192-15 15 July 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · rama de actividad

Contribution of business activities to a company may qualify for special IS regime and be exempt from VAT

A taxpayer asks whether the non-monetary contribution of real estate leasing and agricultural activities to a new company can apply the special IS regime. The DGT responds that if business activities are contributed with economic autonomy and valid economic reasons, the special regime may apply and VAT exemption is possible.

The question raised

Question raised 1) Whether the aforementioned operation may qualify for the special tax regime under Chapter VIII of Title VII of the Recast Text of the Corporate Income Tax Law, approved by Royal Legislative Decree 4/2004, of March 5.

The DGT's ruling

The contribution of business lines may qualify for the special regime if the segregated assets allow for the development of an autonomous economic activity. In this case, as there are material and human resources available for both businesses, the operation could apply said regime. For VAT purposes, the contribution of the leasing activity could be exempt from tax if an autonomous economic unit is transferred, whereas the agricultural activity could be considered a mere transfer of assets if it lacks sufficient structure. For Personal Income Tax (IRPF), if the special regime applies, no income shall be recognized from the transfer.

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