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V2326-23 10 August 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Application of special merger regime depends on meeting commercial and tax requirements

A query was raised regarding whether a merger by absorption of entity B by entity C could qualify for the special merger regime and if the stated economic motive is valid. The DGT ruled that the transaction must comply with both commercial regulations and Article 76.1 of the Corporate Income Tax Act (LIS), and that the validity of the economic motive is a matter of fact to be assessed by the Administration.

The question raised

Question posed: Whether the proposed operation may benefit from the special regime for mergers, demergers, asset contributions, exchange of securities, and change of registered office of a European Company or a European Cooperative Society from one Member State to another within the European Union, as provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax (hereinafter, LIS), and specifically, whether the alleged economic reason is understood as a valid economic reason for the purposes of the provisions of Article 89.2 of the LIS.

The DGT's ruling

To benefit from the special regime, the operation must be carried out within a commercial scope pursuant to Royal Decree-Law 5/2023 and comply with Article 76.1 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. The assessment of these reasons is a matter of fact that the Administration shall determine according to the circumstances of each specific case.

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