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V2590-20 29 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Value swap and partial financial spin-off may qualify under LIS special regime

A consulting company proposes a value swap enabling entity Z to take control, followed by a partial financial spin-off of its shares. The DGT states that both transactions may be subject to the LIS special regime provided legal and commercial requirements are met.

The question raised

1) Whether the described operations of exchange of securities and financial partial spin-off could qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax (LIS).

The DGT's ruling

The exchange of securities may apply the special regime if the beneficiary entity acquires the majority of voting rights and the requirements of Article 80 of the LIS are met. The financial partial spin-off may qualify for the regime if majority holdings are segregated in favor of the beneficiary, while a line of business or majority holdings in other entities remain in the spun-off company. Both operations require that the economic motives be valid and that their primary purpose is not tax advantage. In the event of integration into a new tax group, the rules for the incorporation of eliminations and tax credits under Article 74.3 of the LIS shall apply.

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