A private individual enquires whether the transfer of shares in two construction entities to a new holding company meets the special LIS regime requirements. The DGT states that such regime applies if the participation, uninterrupted ownership and absence of purely fiscal motives are satisfied.
Question posed: Whether the contributions to be made of the shares in entities A and B in the incorporation of an individual holding company in which they will hold 100% of their participation, would meet the legal requirements for the application of the special regime for mergers, demergers, contributions of assets, exchange of securities and change of registered office of a European Company or a European Cooperative Society from one Member State to another of the European Union, regulated in Chapter VII of Title VII of the Corporate Tax Law and in particular those of its article 87, as well as the requirement of valid economic reasons under the terms of article 89.
The contribution of shares by a natural person may qualify for the tax neutrality regime if the receiving entity is resident in Spain and the contributor maintains at least 5% of the equity of the new company. The contributed shares must represent at least 5% of the equity of entities A and B, and must have been held uninterruptedly during the previous year. The regime shall not apply if the primary objective of the transaction is tax advantage without valid economic reasons. In the event that the requirements are met, the values and acquisition dates are maintained, without incorporating income into the contributor's Personal Income Tax (IRPF).
What is published here, applied to a company or a specific case. The first meeting is free.