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V2870-14 24 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial

Special Corporate Tax regime applicable to the contribution of a real estate leasing business branch

A taxpayer has inquired whether their real estate leasing business can qualify for the special Corporate Tax regime through a non-monetary contribution. The Directorate General of Taxes (DGT) has ruled that this is possible, provided the contribution constitutes a business branch with its own organisation and is supported by valid economic reasons.

The question raised

Question posed: Whether it is possible to include such contribution of the real estate leasing business, as a branch of activity, under the special regime of the Corporate Tax set forth in Chapter VIII of Title VII of Royal Legislative Decree 4/2004.

The DGT's ruling

To apply the special regime, the contribution must constitute a branch of activity, understood as a set of assets capable of operating by their own means and with differentiated management and organization. The taxpayer must maintain their accounting in accordance with the Commercial Code. Furthermore, the transaction must respond to valid economic motives and not have the primary objective of tax fraud or evasion. In this case, the purpose of providing business continuity to the heirs is considered a valid economic motive.

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