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V2559-20 28 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special regime if conducted under Law 3/2009 with valid economic reasons

A company seeking a ruling proposes absorbing a wholly-owned subsidiary to simplify its corporate structure. The DGT indicates that the transaction could qualify for the special merger regime provided it complies with commercial regulations and Article 76.1 of the LIS, and is not primarily intended for tax evasion or tax advantages.

The question raised

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 and whether valid economic reasons exist.

The DGT's ruling

To apply the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. Furthermore, its primary objective must not be tax fraud or evasion, requiring valid economic reasons such as the rationalization of activities. Reasons of organizational simplification and cost reduction could be considered valid, although their final classification depends on the verification of all facts and circumstances of the transaction.

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