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V3785-15 30 November 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Mergers and partial demergers may qualify for special tax regime if commercial and economic requirements are met

A company has queried whether a merger by absorption, followed by a partial demerger of its real estate activity, can benefit from the special tax regime. The Directorate General of Taxes (DGT) has ruled that this is possible provided that commercial law requirements are satisfied and the segregated activities constitute autonomous business units with valid economic motives.

The question raised

Question posed: Whether the described operations may qualify for the special tax regime of Chapter VII of Title VII of the Corporate Tax Law 27/2014, of November 27.

The DGT's ruling

For the merger, it must be carried out within the commercial sphere pursuant to Law 3/2009 and comply with Article 76.1.a) of the LIS. In the partial spin-off, the segregated assets must constitute an autonomous economic unit (business line) and the spun-off entity must maintain another business line or majority holdings. The operation must not have the primary purpose of tax fraud or evasion, requiring valid economic motives pursuant to Article 89.2 of the LIS. The existence of tax loss carryforwards does not in itself invalidate the regime if the entities are operational.

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