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V2217-19 19 August 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Merger by absorption may qualify for special regime if carried out for valid economic reasons

The applicant asks whether a merger operation can apply the special regime under the Corporate Income Tax Act (LIS) and if its motives are considered economic. The DGT indicates that if the operation meets commercial requirements and the provisions of Article 76.1 of the LIS, said regime could apply, provided its primary purpose is not to obtain a tax advantage.

The question raised

Question posed: Whether the special tax regime regulated in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax is applicable to the proposed transaction, and whether the reasons indicated to carry out the transaction constitute valid economic reasons for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special merger regime, the transaction must comply with the provisions of Law 3/2009 and Article 76.1 of the LIS. Pursuant to Article 89.2 of the LIS, the regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. Reasons of efficiency, elimination of duplicities, and concentration of economic capacity could be considered valid, although their classification depends on the facts and circumstances of the transaction.

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