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V3692-20 30 December 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · rama de actividad

An autonomous's activity branch contribution to a company may qualify for IS special regime

A physical person with a property rental business asks whether contributing their activity to a company allows use of the IS special regime and if valid economic reasons exist. The DGT states that if the patrimony constitutes an autonomous economic unit and valid economic reasons exist, the requirements are met.

The question raised

Confirmation that the proposed restructuring operation may qualify for the special tax regime under Chapter VII of Title VII of the Corporate Income Tax Law, as well as the existence of valid economic reasons for such purpose.

The DGT's ruling

To apply the special Corporate Income Tax regime, the transferred assets must constitute an autonomous economic unit capable of operating by its own means. The transaction must respond to valid economic reasons and not have the primary purpose of obtaining a tax advantage. Regarding VAT, the transfer shall not be subject to tax if a set of elements forming an autonomous economic unit is transferred. Regarding Transfer Tax (ITP), the restructuring operation is exempt if the requirements of the Corporate Income Tax Law are met.

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