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V3531-15 17 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportación no dineraria

Tax neutrality may apply to the contribution of shares if legal requirements are met and valid economic reasons exist

A taxpayer has queried whether the non-monetary contribution of shares from one entity to another can qualify for the special tax neutrality regime and if the underlying reasons are valid. The DGT has ruled that this is possible provided the requirements of Article 87 of the Corporate Income Tax Act (LIS) are met and the primary purpose of the transaction is not tax evasion or obtaining a tax advantage.

The question raised

Question posed: Whether the proposed operation, involving the contribution of shares of entity D, 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

The contribution of shares may qualify for the special regime of the LIS if the receiving entity is a resident or has a permanent establishment in Spain, the contributor maintains at least 5% of the equity of the receiving entity, and the contributed share represents at least 5% of the equity of the contributing entity, held uninterruptedly during the previous year. Furthermore, the contributing entity must not be an AIE, a UT of companies, nor have the management of movable or immovable property as its main activity. Motives such as structural simplification, project diversification, channeling of investments, improvement of solvency, and generational succession planning are considered valid economic reasons.

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