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V2936-15 7 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for the special regime if carried out for valid economic reasons

A company inquires whether a merger by absorption of companies within its family group may apply the special business restructuring regime. The DGT indicates that this is possible if the operation meets commercial requirements and is carried out for valid economic reasons and not merely for tax purposes.

The question raised

Question posed: In light of the foregoing, we request the Dirección General de Tributos to answer whether the merger by absorption we intend to carry out of all the companies integrated into the family group may qualify for the special tax regime for business restructuring established in Chapter VII, Title VII, of Law 27/2014, of November 27, on Corporate Income Tax, as the alleged reasons are economically valid to benefit from said special tax regime of Corporate Income Tax.

The DGT's ruling

If the merger is carried out through the absorption of companies that are dissolved without liquidation, contributing their assets and complying with Law 3/2009, it could qualify for the special regime of the LIS. Reasons such as reorganization, rationalization, management simplification, financial optimization, and facilitation of generational succession may be considered valid economic reasons. However, the DGT cannot assess the economic motivation of entity B as it is an inactive company with tax loss carryforwards.

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