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V2992-16 28 June 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

Loss of dominant entity status ends fiscal group and requires new consolidation agreements

A consulting company ceases to be the dominant entity in its fiscal group following a share restructuring. The DGT states this results in the extinction of the current fiscal group and necessitates new agreements among entities for the new group.

The question raised

Whether the fact that S2 becomes the new dominant entity implies the dissolution of tax group X with effects from January 1, 2016, and the necessity to adopt new agreements for the application of the special consolidation regime.

The DGT's ruling

When the dominant entity loses its character, the tax group is extinguished pursuant to Article 58.6 of the LIS. If the new dominant entity is a company resident in Spanish territory subject to the regional regulations of the Basque Country, it is equated to the treatment of a non-resident dominant entity. In this scenario, all entities comprising the new tax group must adopt consolidation agreements and communicate the designation of the representative entity before the start of the tax period.

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