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V2719-17 24 October 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Special spin-off regime inapplicable if segregated assets do not constitute business lines

A real estate management company inquired whether its total spin-off could qualify for the special regime under the Corporate Income Tax Act. The DGT ruled that it cannot, as non-proportional distribution of shares requires the transferred assets to constitute autonomous business lines.

The question raised

Whether the described operation 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.

The DGT's ruling

For a non-proportional total spin-off to benefit from the special regime, the spun-off assets must constitute business lines, understood as autonomous economic units capable of operating by their own means. This requires a differentiated business organization and an economic activity that allows for the identification of an asset pool dedicated to it. In the case of isolated real estate assets without prior differentiated management and organization, this requirement is not met.

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