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V3116-15 16 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Absorption merger may qualify for special regime if valid economic reasons exist

A Spanish resident entity proposes an absorption merger with its parent group to simplify the group structure. The DGT assesses whether the operation has genuine economic or merely fiscal objectives and examines how taxable income and negative tax bases are treated.

The question raised

Question raised 1. Whether the merger by absorption of B by A may qualify for the special regime under Chapter VII of Title VII of the LIS and whether the alleged motives may be considered economically valid for the purposes of the provisions of Article 89.2 of the LIS.

The DGT's ruling

To qualify for the special merger regime, the transaction must be carried out within a commercial scope and comply with the requirements of the LIS. The existence of tax loss carryforwards in the absorbed company does not invalidate the regime, provided that the predominant purpose of the merger is not their tax exploitation. The transaction must respond to valid economic motives such as the rationalization of activities or the simplification of the structure.

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