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V2586-17 10 October 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special Corporate Tax regime if valid economic reasons exist

A company under the ZEC regime has enquired whether its merger by absorption with another entity in the same line of business can benefit from the special merger regime. The DGT indicates that this is possible provided that commercial and tax requirements are met and the transaction is driven by genuine economic motives.

The question raised

1) Whether the described operation 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

The operation may qualify for the special regime if it is carried out within a commercial scope pursuant to Law 3/2009 and complies with Article 76.1.a) of the LIS. To avoid the application of Article 89.2 of the LIS, the merger must respond to valid economic reasons, such as the rationalization of activities, and must not have tax advantage as its primary purpose. The fact that the absorbing company is located in the ZEC does not prevent the special regime if the operation yields a positive result for the business activity.

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