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V3604-20 17 December 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

A merger may qualify for the special regime if it meets commercial requirements and has valid economic reasons

It is inquired whether a merger operation may apply the special Corporate Income Tax regime and whether the alleged economic reasons are valid. The DGT indicates that it must comply with commercial regulations and Article 76.1.a) of the LIS, in addition to not having fraud or tax advantage as its primary purpose.

The question raised

Question posed: Whether the described operation may qualify for the tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax, and whether the economic reasons are valid.

The DGT's ruling

To apply the special regime, the operation must be carried out under the Structural Changes Law and comply with Article 76.1.a) of the LIS. The regime shall not apply if the primary objective is fraud or tax evasion, or if it lacks valid economic reasons such as the restructuring or rationalization of activities. Reasons of organizational simplification, management optimization, and cost savings could be considered valid, although their final validation depends on the actual facts and circumstances of the operation.

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