A taxpayer inquires whether the non-monetary contribution of shares from two entities to a third may benefit from the special tax neutrality regime and whether their motives are valid. The DGT responds that it is possible provided that the requirements of Article 87 of the LIS are met and that the proposed motives of simplification and business management are considered economically valid.
Question posed: Whether the proposed operation, involving the contribution of shares from entities C and E, 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 contribution of shares may qualify for the special LIS regime if the beneficiary entity is resident in Spain or has a permanent establishment, the contributor maintains at least 5% of the equity of the recipient entity, and the contributed shares represent at least 5% of the equity of the contributed entities, held uninterruptedly during the previous year. Furthermore, the contributed entities must not have the management of movable or immovable property as their main activity, nor be subject to the AIE or UTES regimes. The regime shall not apply if the primary objective is tax fraud or evasion, but motives of structural simplification, project diversification, channeling of investments, and generational succession planning are considered economically valid.
What is published here, applied to a company or a specific case. The first meeting is free.