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V3207-21 23 December 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Merger by absorption may qualify for special tax regime if commercial requirements are met and valid economic reasons exist

A company enquired whether a merger by absorption of a subsidiary, intended to simplify its structure and optimise management, could qualify for the special Corporate Income Tax regime. The DGT indicates that, provided the requirements of the Structural Changes Act and Article 76.1 of the Corporate Income Tax Act are met, the operation may qualify for said regime as long as valid economic reasons exist.

The question raised

Whether the proposed transaction may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax and whether the described reasons constitute economically valid reasons for the purposes of the provisions of Article 89.2 of the LIS.

The DGT's ruling

To apply the special regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with Article 76.1 of the LIS. The reasons for administrative rationalization and simplification could be considered economically valid, provided that the purpose is not mere tax advantage. The existence of tax loss carryforwards in the absorbed company does not prevent the regime if the activities are maintained and it is not the predominant purpose of the merger.

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