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V2394-14 11 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Special spin-off regime may apply if a branch of activity constitutes an autonomous economic unit

A real estate development company has enquired whether the spin-off of its urban planning management activity into a new company can qualify for the special Corporate Tax regime. The DGT has ruled that if the transfer constitutes an autonomous economic unit and another branch of activity is maintained within the transferring company, the tax requirements are met.

The question raised

1) Whether the described operation may benefit from the special tax regime of Chapter VIII, 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

To benefit from the special partial demerger regime, the segregated assets must constitute an autonomous economic unit capable of operating by its own means. This concept of a line of business should not necessarily be equated with the economic activity requirements of the Personal Income Tax (IRPF). Furthermore, the operation must respond to valid economic reasons and must not have the primary purpose of tax fraud or evasion.

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