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V3384-15 3 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

A partial demerger may qualify for the special regime if business lines are transferred and valid economic reasons exist

The taxpayer asks whether a partial demerger of its activities may apply the special tax regime of the Corporate Income Tax Act (LIS) and whether its economic reasons are valid. The DGT responds that it is possible if the segregated assets constitute a business line and the operation does not have the primary purpose of tax fraud or tax advantage.

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 Act, and whether the economic reasons can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime, the demerger must comply with Article 76.2 of the LIS, transferring as a block a business line that constitutes an autonomous economic unit. The transferring entity must retain in its assets at least one other business line or majority holdings in other entities. Furthermore, pursuant to Article 89.2 of the LIS, the operation must not have the primary objective of tax fraud or tax evasion, and must be based on valid economic reasons such as the restructuring or rationalization of activities.

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