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V2976-19 24 October 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Can exchange regime applicable if LIS requirements met and economic motives exist

Partners inquire whether acquiring 100% of an entity by exchanging shares for another company's securities constitutes a share exchange. The DGT states the operation may fall under the special regime if legal requirements are met and there is no primary intent to commit fraud or tax evasion.

The question raised

Question posed: Whether the described transaction can be configured, for tax purposes, as a share exchange transaction pursuant to Article 76.5 of Law 27/2014, of November 27, on Corporate Income Tax, and whether it is covered by the special tax regime regulated in Chapter VII of Title VII of the same Law.

The DGT's ruling

For a transaction to constitute a share exchange, the acquiring entity must obtain the majority of voting rights through the allocation of other securities representing the share capital to the shareholders. The application of the special regime requires that the shareholders reside in Spain or the EU and that the acquiring entity be a resident in Spain or fall within the scope of Directive 2009/133/EC. The regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring of activities.

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