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V3280-15 26 October 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total

Special spin-off regime applicable if the operation is proportional and based on valid economic grounds

A query was raised regarding whether a total spin-off operation can qualify for the tax neutrality regime and if the alleged economic motives are valid. The DGT ruled that, as it is a proportional spin-off, it meets the requirements of the Corporate Income Tax Act (LIS), and that the described motives of rationalisation and efficiency are economically valid.

The question raised

Whether the proposed operation could qualify for the special tax regime regulated in Chapter VII of Title VII of the Corporate Income Tax Law. And whether the economic motives can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

A proportional total demerger meets the requirements of the LIS to apply the special regime of Chapter VII of Title VII. It is not necessary for the segregated assets to constitute business lines if the allocation of values is proportional. The motives of activity rationalization, management improvement, efficiency, and resource optimization are considered valid economic motives pursuant to Article 89.2 of the LIS.

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