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V2842-17 3 November 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

It is possible to apply the special merger and share exchange regime if valid economic reasons exist

A family business asks whether it can access the special merger and share exchange regime to establish a holding and merge two real estate companies. The DGT confirms this is possible if LIS requirements are met and valid economic grounds exist, allowing also the offset of negative taxable bases within certain limits.

The question raised

Question posed: Whether the described operations may qualify for the special regime established in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The exchange of securities and the merger may qualify for the special regime of the LIS if the commercial requirements are met and valid economic reasons exist. In the merger, the absorbing company subrogates into the negative tax bases of the absorbed company within the legal limits. Regarding VAT, the transaction shall not be subject to tax if the transferring entity is company D, as it constitutes an autonomous economic unit, but it shall be subject to tax if it is company C, as it constitutes a mere transfer of assets. The ITP and ISD will not accrue if the circumstances of the second additional provision of the LIS concur.

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