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V3025-19 28 October 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for the special regime if mercantile and tax requirements are met

A query is made as to whether a merger by absorption of several entities into a single one meets the requirements of the special merger regime. The DGT indicates that it must comply with mercantile regulations and Article 76.1 of the LIS, in addition to not having fraud or tax evasion as its primary purpose.

The question raised

Question posed: Whether the described merger by absorption operation would meet the requirements to apply the special regime for merger, spin-off, asset contribution, exchange of securities, and change of registered office operations of a European Company or a European Cooperative Society from one Member State to another of the European Union, as set forth in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, with special consideration of the alleged economic reasons as valid economic reasons.

The DGT's ruling

To apply the special regime, the operation must be carried out under the protection of Law 3/2009 and comply with Article 76.1 of the LIS. The regime will not apply if the primary objective is fraud or tax evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. Reasons of structural simplification, improvement of financial position, cost savings, and optimization of resources could be considered valid, although their classification depends on the facts and circumstances of each case.

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