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V3779-15 30 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Special merger regime may apply if the transaction is carried out for valid economic reasons

An entity has enquired whether a merger by absorption can qualify for the special tax regime and if its underlying motives are considered valid. The Directorate General for Taxes (DGT) has responded that, provided commercial regulations and Corporate Income Tax Law requirements are met, the transaction may benefit from said regime if its primary purpose is not tax fraud or tax advantage.

The question raised

Question posed: Whether the special tax regime of Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax is applicable to the proposed transaction. And whether the reasons indicated for carrying out the merger by absorption constitute valid economic reasons for the purposes of applying the aforementioned special regime.

The DGT's ruling

To benefit from the special merger regime, the transaction must be carried out within a commercial scope pursuant to Law 3/2009 and comply with the terms of Article 76.1 of the LIS. The regime shall not apply if the primary objective is tax fraud or evasion, or if there are no valid economic reasons such as the restructuring or rationalization of activities. In this specific case, centralizing decision-making and reducing administration and management costs are considered valid economic reasons.

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