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V2505-24 10 December 2024 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for tax neutrality if not intended for fraud

A company has requested a ruling on whether a merger by absorption of two subsidiaries can benefit from the tax neutrality regime and if it meets valid economic purposes. The DGT has determined that, provided the operation meets commercial requirements and the provisions of Article 76.1 of the LIS, such a regime may apply as long as the primary objective is not tax fraud or evasion.

The question raised

Whether the described operation could apply the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax and whether the operation responds to valid economic reasons.

The DGT's ruling

The merger operation may qualify for the tax neutrality regime if carried out under Royal Decree-Law 5/2023 and complies with Article 76.1 of the LIS. In this case, as the absorbing company holds more than 5% of the capital, income from the cancellation of holdings shall not be integrated (Art. 82.1 LIS). However, the regime shall not apply if the primary objective is tax fraud or evasion (Art. 89.2 LIS).

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