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V2367-20 10 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demerger of a company may qualify for special Corporate Tax regime if legal requirements are met

A tanning company intends to carry out a total demerger to separate its real estate assets from its tanning activities. The DGT analyses whether the operation qualifies as a total demerger for the special Corporate Tax regime, the offsetting of tax losses, and the implications for other taxes.

The question raised

1) Whether the described transaction could qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The transaction may qualify for the special Corporate Income Tax regime if it meets the requirements of Article 76.2.1.a) of the Corporate Income Tax Law and is carried out for valid economic reasons. Negative tax bases may be offset by the beneficiary entities according to their generating activity. Exemption from VAT depends on whether the transferred elements constitute an autonomous economic unit. The spin-off transaction is exempt from Transfer Tax and Stamp Duty as it constitutes a restructuring.

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