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V2874-23 25 October 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

The spin-off of isolated real estate assets does not allow for the application of the tax neutrality regime if they do not constitute a line of business

A construction and transport company inquires whether the segregation of its real estate assets into a new company may qualify for the special regime for partial spin-offs. The DGT responds that to apply this regime, the segregated assets must constitute an autonomous line of business that already existed in the transferring entity.

The question raised

Question posed: Whether the described operation may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax and whether valid economic reasons exist.

The DGT's ruling

To benefit from the special regime for partial spin-offs, the segregated assets must be a line of business that constitutes an economic unit capable of operating by its own means. This requires a differentiated business organization and an economic activity that already existed previously in the transferring entity. If the operation consists of segregating isolated real estate assets without a prior leasing activity that organizes them, the requirement of a line of business is not met and tax neutrality is not applicable.

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