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V2426-15 30 July 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Possibility of applying the special tax regime for share exchanges and mergers in transactions between non-resident entities

A query was raised regarding whether a share exchange and subsequent merger between non-resident entities may qualify for the special tax regime. The DGT has ruled that this is possible, provided that the requirements of the Corporate Income Tax Act (LIS) are met and valid economic reasons exist.

The question raised

Question raised 1) Whether the described operations of share exchange and merger may qualify for the special tax regime of Chapter VII of Title VII of Corporate Tax Law 27/2014, of November 27.

The DGT's ruling

In a share exchange, the concept is defined by considering all partners, allowing the special regime to be applied even if only a part resides in the EU. For mergers between non-resident entities, the special regime may be applied if the requirements of Article 76.1.a) of the LIS are met and its primary purpose is not tax fraud or evasion. Valid economic reasons, such as the rationalization of activities or efficiency in decision-making, justify the application of the regime. The operation must be communicated to the Tax Administration in accordance with the Corporate Tax Regulations.

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