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V2564-14 1 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen fiscal especial

Merger of European companies may qualify for special regime if valid economic reasons exist

A query was raised regarding whether a merger operation can apply the special tax regime for European companies. The DGT ruled that this is possible provided the operation meets the requirements of the TRLIS and the Law on Structural Modifications, and is carried out for economic reasons rather than for the purpose of obtaining a tax advantage.

The question raised

Question posed: Whether the described operation may benefit from the special tax regime of Chapter VIII, Title VII of the Recast Text of the Corporate Income Tax Law approved by Royal Legislative Decree 4/2004, of March 5.

The DGT's ruling

To benefit from the special regime for European companies, the operation must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 83.1 of the TRLIS. The regime does not apply if the primary objective is fraud or tax evasion, or if it lacks valid economic motives such as the restructuring or rationalization of activities. The existence of tax loss carryforwards of small amounts does not in itself invalidate the application of the regime if the merger benefits the activity of the operating companies.

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