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V3317-23 28 December 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Tax neutrality may apply to mergers by absorption if legal requirements are met

The applicant inquired whether the absorption of Companies A and B by Company C could qualify for the special merger regime. The DGT ruled that if the transaction meets commercial requirements and complies with Article 76.1 of the Corporate Income Tax Act, tax neutrality, the non-integration of income, and the continuity of securities may be applied.

The question raised

1. Whether the merger transaction by which Company C would absorb Companies A and B meets all the legally provided requirements to qualify for the merger figure provided for in Article 76.1.a) of Chapter VII of Title VII of the LIS.

The DGT's ruling

The transaction may qualify for the special regime if it is carried out within a commercial scope pursuant to Royal Decree-Law 5/2023 and complies with Article 76.1 of the LIS. Under this regime, income from the transfer shall not be integrated (Art. 77 LIS) and the values and seniority of the assets shall be maintained (Art. 78 LIS). Income from the cancellation of the participation in the absorbed entity shall not be integrated if the percentage set forth in Article 82.1 LIS is met. However, the regime shall not apply if the primary objective is tax fraud or evasion or if there are no valid economic reasons (Art. 89.2 LIS).

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