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V2434-17 2 October 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

A merger may qualify for the special regime if it meets commercial requirements and has valid economic reasons

A company managing financial assets has enquired whether its merger with another company can apply the special Corporate Tax regime. The DGT indicates that it must comply with commercial regulations and Article 76.1 of the Corporate Tax Act, and that its primary purpose must not be to obtain a tax advantage.

The question raised

Question raised 1) Whether the described transaction may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, given the existence of valid economic reasons.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The regime shall not apply if the primary objective is fraud, evasion, or the mere obtaining of a tax advantage without valid economic reasons. The simplification of management, the reduction of fixed costs, and the reduction of administrative expenses may be considered valid economic reasons pursuant to Article 89.2 of the LIS.

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