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V2962-20 1 October 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión transfronteriza

Cross-border mergers and prior spin-offs may qualify for special CIT and VAT regimes under certain requirements

A Spanish company proposes a spin-off of its assets followed by a cross-border merger with a Dutch entity. The DGT examines whether these operations meet the requirements to apply the special regime for mergers in Corporate Income Tax (CIT) and the group of entities regime for VAT.

The question raised

1. In relation to the operation in general:

The DGT's ruling

For the spin-off, it may qualify for the special Corporate Income Tax regime if it constitutes a contribution of a line of business that allows for the development of an autonomous economic activity. The cross-border merger may apply the special regime if it is carried out under the Law on Structural Modifications and complies with the Corporate Income Tax Act. Regarding VAT, the spun-off entity (A) may not be integrated into the group of entities until the following calendar year. Following the merger, the Dutch absorbing entity may be considered a dominant entity if it has a permanent establishment in Spain to which the holdings are allocated.

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