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V3683-20 29 December 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Special partial demerger regime applicable when transferring a business unit with economic autonomy and valid motives

The inquiry examines whether a segregation of activities can qualify for the special demerger regime under the Corporate Income Tax Act and whether valid economic motives exist. The DGT rules that the transferred assets must constitute an autonomous business unit and the operation must not have fraud or tax advantage as its primary purpose.

The question raised

Question posed: Whether the described operation could 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 valid economic reasons exist.

The DGT's ruling

For a partial spin-off to comply with Article 76.2 of the LIS, the segregated assets must constitute a line of business, understood as a set of elements capable of operating on its own with a distinct organization. Likewise, pursuant to Article 89.2 of the LIS, the operation must not be carried out with the primary objective of obtaining a tax advantage, but rather for valid economic reasons such as the restructuring or rationalization of activities. Reasons involving individualized management and the enhancement of business units could be considered economically valid, although their validity depends on the assessment of the facts by the Administration.

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