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V4658-16 3 November 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · comunidad de bienes

Contributions of property shares to a company may qualify for special IS regime

Property owners from a rental community inquire whether their share can be contributed to a company under the special IS regime and if their reasons are economically valid. The DGT confirms this is possible if participation and economic activity criteria are met, and that their motives are economically sound.

The question raised

1. Whether the contributions made by each of the co-owners to a new company or to a pre-existing company of their interest in the community of property meet the requirements to qualify for the special tax regime under Chapter VII of Title VII of the Corporate Income Tax Law. And whether the alleged motives can be deemed valid economic motives for these purposes.

The DGT's ruling

The contribution of the ideal share of each co-owner may qualify for the special regime under Article 87.1 of the LIS if the receiving entity is a resident, each contributor holds at least a 5% stake in the equity, and the contributed elements are used for economic activities. The motives of optimization, professionalization, and generational succession are considered valid economic reasons. The transfer is not subject to VAT if it constitutes an autonomous economic unit. The exemption from IIVTNU does not apply because the contribution of shares is not equivalent to the contribution of a branch of activity.

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