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V2887-15 6 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

The non-application of the merger regime due to insufficient economic reasons only eliminates the tax advantage

The taxpayer asks whether, in the event of an inspection that considers a merger to lack valid economic reasons, the transferring entity must be taxed on the difference between the market value and the tax value of the assets. The DGT responds that the non-application of the special regime should only eliminate the effects of the tax advantage obtained.

The question raised

Question posed: Whether the non-application of the special regime of tax neutrality to the merger by absorption of entity T by the taxpayer, in the event that the Tax Administration, following the corresponding verification procedures, considers its valid economic reasons to be insufficient, would in no case imply that the transferring entity must integrate into its individual tax base the difference between the market value of the assets transferred on the occasion of the merger and their tax value, in light of the provisions of the last paragraph of section 2 of Article 89 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

If the Administration determines that the tax advantage is predominant over the economic reasons, Article 89.2 of the LIS shall apply. In this case, the non-application of the special regime is limited to eliminating the effects of the tax advantage, understood as the reduction of the tax burden derived from tax deferral. This implies that, in the scenario presented, the consequence would be the non-utilization of negative tax bases, without this requiring the integration of the difference in the value of the assets into the tax base.

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