Two companies (X and Z) proposed merging to form a new entity (Newco) and dissolving themselves. They asked whether the operation falls under the IS neutrality regime and whether eliminating management redundancies constitutes a valid economic reason. The DGT confirmed both: the merger falls under LIS Article 76.1.b) and the objective of reducing costs and formal obligations is considered a valid economic reason, notwithstanding possible subsequent verification.
Question posed: Whether the tax regime regulated in Chapter VII of Title VII of Law 27/2014, on Corporate Income Tax, is applicable to the proposed merger, and whether the reasons indicated to carry out the operation constitute valid economic reasons for the purposes of applying the aforementioned regime.
The merger in which two companies transfer their assets in bulk to a newly created entity and are dissolved without liquidation meets the definition of Article 76.1.b) of the LIS. If the operation is carried out under Royal Decree-Law 5/2023, the income generated is not included in the taxable base of the transferring companies nor of the partners (Articles 77 and 81 LIS). The absence of valid economic reasons constitutes a presumption of fraud, but not an autonomous requirement: it is sufficient that the operation reasonably aspires to a business objective. The elimination of duplications in management costs, administration, and formal obligations was accepted as a valid economic reason, in accordance with the jurisprudence of the Supreme Court (judgments of November 23, 2016, and November 16, 2022).
What is published here, applied to a company or a specific case. The first meeting is free.