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V4383-16 11 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión parcial

Partial demergers may qualify for special Corporate Tax regime and be exempt from VAT, Stamp Duty, or Property Transfer Tax

A company engaged in courier services, renovations, and leasing has queried whether its partial demerger, intended to separate its real estate activities, can qualify for the special Corporate Tax regime. The Directorate-General for Taxes (DGT) has ruled that, provided the requirements of an autonomous economic unit and valid economic reasons are met, the transaction is eligible for this regime and will not be subject to VAT, Stamp Duty (ITP/AJD), or Property Transfer Tax (IIVTNU).

The question raised

Question raised 1) Whether the described operation can benefit from 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 benefit from the special Corporate Income Tax regime, the spin-off must be carried out within a commercial scope and the segregated assets must constitute an autonomous economic unit (branch of activity). The operation must not have the primary purpose of tax fraud or evasion, but rather valid economic motives. Under these conditions, the transfer of elements forming an autonomous economic unit is not subject to VAT. Likewise, the restructuring operation is not subject to Transfer Tax/Stamp Duty and does not trigger the Tax on Legal Documents, Notarial Acts and Documentary Transactions according to the second additional provision of the Corporate Income Tax Law.

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