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V3152-21 20 December 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Special spin-off regime cannot be applied if segregated assets do not constitute a pre-existing line of business

A query was raised regarding whether a partial spin-off followed by a share exchange could qualify for the special Corporate Tax regime. The DGT ruled that, based on the facts, the assets to be transferred do not appear to constitute an autonomous line of business with its own prior organisation.

The question raised

Whether the proposed operations of partial spin-off and subsequent exchange of securities would be subject to the special regime contained in Articles 76 et seq. of Law 27/2014, of November 27, on Corporate Income Tax, and specifically whether its application would result in the absence of taxation for both the companies involved and the shareholder, pursuant to the aforementioned special regime.

The DGT's ruling

To benefit from the special regime for spin-offs, the segregated assets must constitute one or more lines of activity, understood as an autonomous economic unit with differentiated material and human resources. This requires that a differentiated business organization exists for each set of assets within the demerged entity prior to the operation. If the assets are isolated elements without prior management and organization, the operation cannot qualify for the special regime.

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