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V3051-19 29 October 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Total demerger may not qualify for special regime if deemed merely preparatory to a subsequent donation

A query was raised regarding whether a total demerger of a construction company could qualify for the special Corporate Tax regime. The DGT indicates that, even if commercial and proportionality requirements are met, if the operation is preparatory to a subsequent donation of shares, it will not be considered motivated by valid economic reasons and therefore cannot benefit from the special regime.

The question raised

Question raised = 1) Whether the described operation could qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special spin-off regime, the operation must be carried out for valid economic reasons and not for the purpose of obtaining a tax advantage. If the proportional spin-off is used as a preliminary step for a donation of shares to family members, the operation would be considered merely preparatory to the donation. In that case, the requirement of valid economic reasons would not be met and the special regime of Chapter VII of Title VII of the LIS would not be applicable.

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