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V3766-16 8 September 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · canje de valores

Special tax regime for share exchanges may apply if valid economic reasons exist

A query was raised regarding whether an acquisition of shares to create a holding company could qualify for the special tax regime for share exchanges. The Directorate General for Taxes (DGT) ruled that this is possible, provided the requirements of Article 80 of the Corporate Income Tax Act are met and the transaction is supported by valid economic reasons.

The question raised

Question posed: Whether the described transaction may benefit from the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special regime for the exchange of securities, the entity must acquire holdings that allow it to obtain the majority of voting rights and comply with the requirements of Article 80 of the Corporate Income Tax Law. The transaction may not benefit from this regime if its primary objective is tax fraud or evasion, or if it lacks valid economic reasons such as the restructuring or rationalization of activities. Reasons such as the centralization of holdings, investment management, risk separation, and the pursuit of solvency are considered economically valid.

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