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V4852-16 11 November 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · fusión por absorción

Total spin-off following a merger may qualify for special Corporate Tax regime if commercial and economic requirements are met

A query was raised regarding whether a total spin-off of a company resulting from a merger can apply the special Corporate Tax regime following the death of a shareholder. The DGT ruled that this is possible provided the operation is carried out for commercial purposes and has valid economic reasons.

The question raised

Whether the application of the special tax regime established in Chapter VII of Title VII of Law 27/2014 on Corporate Income Tax is also applicable to the demerger into three companies of the company resulting from a merger by absorption, assigning the shares in the company destined for the deceased brother to each of those three companies.

The DGT's ruling

Mergers and total demergers may qualify for the special regime under the LIS if they are carried out under Law 3/2009 and comply with the requirements of said law. In a demerger, if the allocation is proportional, it is not necessary for the segregated assets to constitute business lines. However, the regime shall not apply if the main objective of the operation is tax fraud or evasion without valid economic reasons.

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