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V2456-19 16 September 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · rama de actividad

Contribution of an activity branch may qualify for special regime

A taxpayer asks whether the contribution of their passenger transport activity to a company may apply to the LIS special regime. The DGT states that this is possible if the capital block constitutes an activity branch and is carried out for valid economic reasons.

The question raised

Question posed: Whether the described operation 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, and whether valid economic reasons exist.

The DGT's ruling

For the contribution of a line of business to qualify for the special regime, the segregated assets must constitute an autonomous economic unit capable of operating by its own means. Likewise, the activity to be developed by the acquirer must have previously existed in the transferor. The application of the regime is excluded if the primary objective of the operation is tax fraud or evasion, or if it lacks valid economic reasons. Reasons such as optimization, risk compartmentalization, and rationalization could be considered valid, although their assessment depends on the facts.

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