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V3210-17 14 December 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Non-proportional total demergers require the transfer of business lines to qualify for the special regime

A query was raised regarding whether a non-proportional total demerger of real estate assets can qualify for the special regime under the Corporate Income Tax Act (LIS). The Directorate General for Taxes (DGT) ruled that this is not possible because the segregated assets do not constitute autonomous business lines.

The question raised

Whether the described operation could qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

For a non-proportional total spin-off to qualify for the special regime, the acquired assets must constitute business lines pursuant to Article 76.4 of the LIS. A business line requires an autonomous economic unit with a distinct business organization. In this case, as there is no separate management and organization that allows for the autonomous conduct of activities, the operation does not meet the tax requirements.

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