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V3540-15 17 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Shareholdings can qualify for LIS special regime if legal requirements are met and valid economic reasons exist

A taxpayer asks whether contributing 25% of their shareholdings in a company to a holding society qualifies for the LIS special regime and whether the motives are valid. The DGT states that this is possible provided the requirements of Article 87 are met and the transaction is not primarily aimed at tax fraud or avoidance.

The question raised

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

The DGT's ruling

The non-monetary contribution of shares may qualify for the special regime under Article 87 of the LIS if the beneficiary entity is resident in Spain, the contributor maintains at least 5% of the equity, and the shareholding has been held uninterruptedly during the previous year. To avoid the application of Article 89.2 of the LIS, the transaction must have valid economic reasons, such as the restructuring or rationalization of activities, and must not have the primary objective of obtaining a tax advantage. Reasons such as the centralization of decisions, the entry of investors, or the separation of assets may be considered economically valid.

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