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V3776-15 30 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

Projected operation ineligible for special merger tax regime as it is not a merger of a wholly-owned subsidiary

A query was raised regarding whether a merger between a parent company (A) and its subsidiary (B), where the parent holds only 80%, meets the requirements for the special merger tax regime. The DGT ruled that, as there is no 100% ownership and it is not an assimilated case, the operation does not satisfy the legal requirements.

The question raised

Whether the proposed merger meets the requirements of Article 76 of Law 27/2014, of November 27, on Corporate Income Tax and, therefore, if valid economic reasons exist, it may apply the Special Regime of Chapter VII of Title VII of the LIS.

The DGT's ruling

The transaction does not constitute a merger of a wholly-owned subsidiary nor an assimilated case under Law 3/2009, as the absorbing company is not the holder of all the shares of the absorbed company. Since the condition of the absorption of a wholly-owned subsidiary is not met, the transaction does not comply with Article 76.1.a) of the LIS. Therefore, it cannot benefit from the special tax regime for mergers provided for in Chapter VII of Title VII of the LIS.

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