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V3136-23 4 December 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total no proporcional

Non-proportional total spin-offs ineligible for special Corporate Tax regime or VAT exemption

A company engaged in flour production and real estate development has queried whether its non-proportional total spin-off qualifies for the special Corporate Tax regime and if the transfer is exempt from VAT. The DGT has ruled that, as the transfer of distinct business lines was not proven, the requirements for both the special Corporate Tax regime and VAT exemption are not met.

The question raised

1. Confirmation of the concurrence of the necessary circumstances to consider that both the assets assigned to the flour production activity and the assets assigned to the real estate development activity can be classified as business lines.

The DGT's ruling

For a non-proportional total spin-off to benefit from the special Corporate Income Tax regime, the segregated assets must constitute distinct business lines, i.e., autonomous economic units capable of operating by their own means. In this case, the information provided does not allow for the observation of the separate transfer of assets and liabilities assigned to each activity. Therefore, the operation does not qualify for the special Corporate Income Tax regime nor for the exemption from VAT, with each element being taxed independently.

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