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V3564-15 18 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

Tax group ceases to exist on the date the merger of the parent company is registered in the Mercantile Registry

A parent company within a tax consolidation group is absorbed by one of its subsidiaries through a reverse merger. The Directorate General for Tax (DGT) rules on when the group is dissolved, how income is allocated, and the effects of universal succession on the new tax group.

The question raised

1) Whether the current group under tax consolidation will be dissolved due to the dissolution of its dominant company on the date the merger is registered in the Mercantile Registry.

The DGT's ruling

The tax group is dissolved upon the dissolution of the dominant entity on the date the merger is registered in the Mercantile Registry. The income of the absorbed company shall be attributed to the absorbing company from the beginning of the fiscal year due to the accounting retroactivity of the merger. As it constitutes a succession by universal title, the entities that formed the previous group shall form a new tax group with the absorbing entity as the new dominant entity. In this restructuring scenario, the specific effects provided for in Article 74.3 of the LIS shall apply.

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