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V2848-21 17 November 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Non-proportional total demergers require segregated assets to constitute a line of business to qualify for the special regime

A catering company has enquired whether it can carry out a total demerger to separate its business activity from its real estate premises under the special regime. The Directorate General for Taxes (DGT) indicates that if the demerger is non-proportional, the transferred assets must constitute autonomous lines of business, a requirement that is not met if an isolated property is segregated.

The question raised

Whether the described operation could qualify for the 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

In order for a non-proportional total spin-off to qualify for the special regime, the segregated assets must constitute business lines, understood as autonomous economic units capable of operating by their own means. The segregation of an isolated premises does not constitute a business line pursuant to Article 76.4 of the LIS. If the spin-off is proportional, it is not required that the assets be business lines, provided that the operation has valid economic motives and not a merely tax-driven purpose.

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