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V3124-14 19 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Special regime for share exchanges and contributions of business activities may apply if legal requirements are met

A married couple inquired whether the contribution of their company shares to an entity, followed by the contribution of a business activity to a new company, could qualify for the special Corporate Tax regime. The DGT ruled that this is possible provided that requirements regarding majority voting rights and residency are met, and that the business activity constitutes an autonomous economic unit with valid economic reasons.

The question raised

Application of the special regime of Chapter VIII of Title VII of the recast text of the Corporate Income Tax Law to the operation presented. And whether the alleged reasons are considered economically valid for these purposes.

The DGT's ruling

For the exchange of securities, the entity must acquire the majority of voting rights and both the acquirer and the contributed entities must be residents in Spain. In the contribution of business lines, the assets must constitute an autonomous economic unit that allows for the development of an economic activity. These operations must be carried out for valid economic reasons, such as restructuring or rationalization, and not for the purpose of obtaining a tax advantage.

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