Skip to content
Back to index
V2216-14 8 August 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Valid economic reasons and absence of double loss compensation in special merger regime

A company inquired whether a merger by absorption of a subsidiary could qualify for the special merger regime and whether its motives were economically valid. The DGT responds that if the transaction meets commercial requirements and aims at reorganisation rather than solely tax purposes, the special merger regime applies.

The question raised

Whether the application of the special regime of Chapter VIII of Title VII of the consolidated text of the Corporate Income 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 merger operation may qualify for the special regime of the TRLIS if it meets the requirements of commercial law and is carried out for valid economic reasons, such as the rationalization of activities or the improvement of efficiency, and not for the sole purpose of obtaining a tax advantage. The negative tax bases of the absorbed company may be offset in the absorbing company, provided that there is no double offsetting of losses (for example, by utilizing the same loss at the level of the partners and in the company).

Book your free first meeting