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V4584-16 25 October 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · aportaciones no dinerarias

Special regime for non-monetary contributions applicable if LIS requirements and valid economic reasons are met

A Spanish resident taxpayer inquired whether contributing their interest in an entity could qualify for the special regime under the Corporate Income Tax Act (LIS) and if their reasons were valid. The DGT ruled that this is possible provided the requirements for participation and economic activity are met, and considers the proposed reorganization reasons to be economically valid.

The question raised

Question posed: Whether the proposed transaction could qualify for the special tax regime regulated in Chapter VII of Title VII of the Corporate Income Tax Law. And whether the economic reasons can be considered valid for the purposes of applying the aforementioned special regime.

The DGT's ruling

To apply the special regime for non-monetary contributions under Article 87 of the LIS, requirements such as the residence of the beneficiary entity, a minimum participation of 5%, and the condition that the contributed entity does not have the management of movable or immovable property as its main activity must be met. The economic reasons for the transaction must be valid and not have the primary purpose of obtaining a tax advantage, pursuant to Article 89.2 of the LIS. In this case, the reasons of risk separation and flexibility for reinvestment are considered economically valid.

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