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V4309-16 6 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Transaction may qualify for special Corporate Tax regime if valid commercial and economic requirements are met

A company has enquired whether the transfer of a slot machine business can be treated as a merger for Corporate Tax purposes. The DGT indicates that this may be possible provided it complies with commercial regulations and has valid economic reasons; however, it warns that the transfer of machines and bank balances does not constitute an autonomous economic unit for VAT purposes.

The question raised

Question raised 1) Whether the described transaction may qualify for the 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 Corporate Income Tax regime, the transaction must comply with commercial merger regulations and Article 76.1.a) of the Corporate Income Tax Law, in addition to having valid economic reasons pursuant to Article 89.2 of the Corporate Income Tax Law. Regarding VAT, the transfer of gaming machines and bank balances is considered a mere transfer of assets and not an autonomous economic unit, and is therefore subject to the tax. Regarding Transfer Tax and Stamp Duty, as it is a restructuring operation, it is not subject to the corporate operations modality and is exempt under the other modalities.

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