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V2894-15 6 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Special merger regime may apply if the transaction has valid economic reasons

A company has requested clarification on whether a merger by absorption of a wholly-owned subsidiary can qualify for the special Corporate Tax regime and its status under the ITPAJD. The DGT ruled that this is possible provided the requirements of the Corporate Tax Act (LIS) are met and valid economic reasons exist, and that the transaction will neither be subject to nor exempt from ITPAJD.

The question raised

Question posed: Whether the special tax regime of Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax is applicable to the proposed operation. And whether the mentioned entities could benefit from the provisions of Article 49 or 52, or, where applicable, any other article of Law 3/2009, in order to achieve the described merger.

The DGT's ruling

If the merger is carried out within the commercial sphere pursuant to Law 3/2009 and complies with Article 76.1 of the LIS, it may benefit from the special regime. In this case, income from the merger shall not be integrated into the transferring entity, nor shall income from the cancellation of participation be integrated if at least 5% of the capital is held. The reasons alleged for the operation must be valid economic reasons to avoid the application of the general regime due to fraud or evasion. Regarding the ITPAJD, the operation is a restructuring, therefore it is not subject to the corporate operations modality and is exempt from the onerous transfers and documented legal acts modalities.

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