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V2621-22 23 December 2022 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special regime if carried out for valid economic reasons

A query was raised regarding whether a merger by absorption between two entities can apply the special regime under the Corporate Income Tax Act (LIS). The Directorate General for Taxes (DGT) indicates that if the operation meets commercial requirements and those set out in Article 76.1 of the LIS, it could qualify for said regime, provided its primary purpose is not tax advantage.

The DGT's ruling

To apply the special merger regime, the transaction must comply with the provisions of Article 76.1 of the LIS and the Law on Structural Modifications of Commercial Companies. Pursuant to Article 89.2 of the LIS, this regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. The motives of integration, simplification of structure, and exploitation of synergies could be considered economically valid, although their classification depends on the facts and circumstances of each case.

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