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V3648-13 19 December 2013 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducción por reinversión

Share purchases via takeover can enable extraordinary profit reinvestment

A credit institution asks whether buying shares of another company through a takeover enables reinvestment of extraordinary profits and what happens if a merger by absorption follows. The DGT responds that such a purchase is valid for reinvestment provided the requirements on shareholding and affected assets are met.

The question raised

1. Acquisition of the shares of company B by the consulting entity within the framework of the takeover bid.

The DGT's ruling

The acquisition of shares in an entity that does not belong to the same group is an eligible element for the reinvestment of extraordinary profits. If a merger occurs following the acquisition, the deduction is not lost provided that other eligible elements are acquired within the reinvestment period. In such a case, the reinvestment shall be understood to have been carried out at the tax value assigned to the assets acquired in the merger, which must correspond to the total amount initially reinvested.

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