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V2823-14 20 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación de ramas de actividad

Special regime for contribution of business branches cannot be applied if asset allocation period is not met

A taxpayer inquired whether the non-monetary contribution of their real estate development activity to a company could qualify for the special regime under the TRLIS. The DGT ruled that this is not possible because the properties have not been allocated to the economic activity for the minimum required period.

The question raised

Question raised 1) Whether the described operation may qualify for the special tax regime of Chapter VIII, Title VII of the Recast Text of the Corporate Tax Law approved by Royal Legislative Decree 4/2004, of March 5.

The DGT's ruling

For the contribution of a line of business by a natural person to qualify for the special regime of the TRLIS, there must be a distinct management and organization that constitutes a line of business both prior to and following the operation. In this case, as three years have not elapsed since the properties were allocated to the economic activity, the requirement of allocation demanded by the LIRPF is not met, thereby preventing the use of the special regime under article 94.2 of the TRLIS.

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