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V2442-24 4 December 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total proporcional

Proportional total split of real estate society qualifies for tax neutrality regime

A real estate leasing company proposes a full split, transferring its assets to two newly created entities, allocating ownership shares proportionally to existing partners. The DGT confirms the operation meets the requirements of article 76.2.1.a) of the Income Tax Law (LIS) for the tax neutrality regime, without needing to prove that the split assets constitute business branches, due to the proportional allocation. Family continuity and orderly succession are valid economic grounds under article 89.2 of the LIS.

The question raised

Question raised 1. Whether the spin-off proposed to be carried out could apply the tax neutrality regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

Proportional total spin-off (shareholders receive interests in each beneficiary in the same percentage as they held in the spun-off company) complies with Article 76.2.1.a) of the LIS without requiring the assets to constitute business lines, a requirement that only applies in the non-proportional case under Article 76.2.2 of the LIS. The neutrality regime determines: non-inclusion of income in the transferor (Art. 77 LIS), maintenance of historical values in the transferee (Art. 78 LIS), and non-taxation of resident individual shareholders who maintain the tax value of their previous interests (Art. 81 LIS, Art. 37.3 LIRPF). The absence of fraud or evasion as the primary objective is a prerequisite for application (Art. 89.2 LIS).

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