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V3106-19 6 November 2019 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Mergers may qualify for special tax regime if driven by valid economic reasons rather than purely tax advantages

A taxpayer queried whether a merger between two family-owned real estate companies could qualify for the special Corporate Income Tax regime. The Directorate General for Taxes (DGT) ruled that if the transaction meets commercial requirements and aims for economic rationalisation rather than tax benefits, the special regime may be applied.

The DGT's ruling

To apply the special merger regime under Chapter VII of Title VII of the LIS, the transaction must be carried out under Law 3/2009 and comply with Article 76.1 of the LIS. Article 89.2 of the LIS excludes this regime if the primary objective is tax fraud or evasion or if there are no valid economic reasons. The existence of tax loss carryforwards in the absorbed company does not in itself invalidate the regime if the merger strengthens the equity position and its preponderant purpose is not their exploitation.

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