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V2571-14 1 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Contribution of electricity distribution assets may constitute a business line if it forms an autonomous economic unit

A company has requested clarification on whether contributing assets dedicated to electricity distribution to a new entity constitutes a non-monetary contribution of a business line. The DGT indicates that if the assets form an economic unit capable of operating independently and there are valid economic reasons, it may qualify for the special tax regime.

The question raised

Whether the totality of the assets currently allocated within the consulting entity to the development of the business activity of electricity distribution, which are to be contributed to the new entity to be incorporated, constitutes a line of business pursuant to the provisions of Article 83.4 of the consolidated text of the Corporate Income Tax Law.

The DGT's ruling

For the operation to constitute a non-monetary contribution of a line of business, the assets must constitute an autonomous economic unit capable of operating by its own means. The tax concept requires that the activity previously exists in the transferor and that the transferee is able to carry it out under analogous conditions. Furthermore, the operation must respond to valid economic reasons and must not have fraud or tax evasion as its primary objective.

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