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V4562-16 24 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión

IIC mergers may qualify for special Corporate Tax regime if commercial requirements and valid economic reasons are met

An IIC management company has enquired whether the merger of investment funds under the UCITS Directive can benefit from the special Corporate Tax regime and if its underlying motives are valid. The Directorate-General for Taxes (DGT) has ruled that if the requirements of Article 76.1 of the Corporate Tax Act are met and valid economic reasons exist, such a regime may be applied.

The question raised

Question raised 1. Whether the aforementioned operations may qualify for the special tax regime under Chapter VII of Title VII of the LIS and whether the reasons stated may be considered valid economic motives for the purposes of the provisions in Article 89.2 of the LIS.

The DGT's ruling

Merger operations between Collective Investment Schemes (CIS) may qualify for the special regime under the Corporate Income Tax Act (LIS) if they are carried out for commercial purposes and comply with Art. 76.1. Reasons such as restructuring, corporate governance efficiency, cost savings, and improved diversification are considered valid economic motives pursuant to Art. 89.2. In these operations, resident partners in Spain shall not recognize income from the attribution of securities and shall maintain their tax value. Regarding the Transfer Tax and Stamp Duty Act (ITPAJD), these restructuring operations are not subject to the corporate operations modality and are exempt from the onerous transfers and documented legal acts modalities.

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