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V2815-16 21 June 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

The partial spin-off of a line of business may qualify for the special Corporate Income Tax regime if valid economic reasons exist

A cooperative inquired whether the segregation of its waste collection and transport activity into a new company could qualify for the special partial spin-off regime. The DGT responds that, if the operation meets commercial requirements and the segregated assets constitute an autonomous line of business, said regime may be applied.

The question raised

1) Whether the described operation may 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

To qualify for the special partial spin-off regime, the operation must be carried out in a commercial context and the segregated assets must constitute an autonomous economic unit (line of business) capable of operating by its own means. Furthermore, the transferring entity must retain at least one other line of business in its assets. The application of the regime requires that the operation's primary objective is not tax fraud or evasion, but rather valid economic reasons.

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