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V5225-26 21 July 2026 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión total proporcional

Proportional total split of a company may qualify for tax neutrality

A real estate company asks whether its proportional total split to create three new entities may benefit from tax neutrality. The DGT responds that such a split may apply if it meets commercial requirements and share allocations are proportional, provided it is not for tax fraud or evasion.

The question raised

Whether the proportional total demerger of A with the creation of three new companies as proposed may benefit from the tax neutrality regime contained in Chapter VII of Title VII of the Corporate Income Tax Law.

The DGT's ruling

The operation of proportional total demerger may qualify for the tax neutrality regime if it is carried out within a commercial framework and the partners receive shares on a proportional basis. The application of this regime does not require the assets to constitute business lines if the allocation is proportional. However, the regime shall not apply if the primary objective is tax fraud or evasion. Regarding VAT, the transfer shall not be subject to tax if the elements constitute an autonomous economic unit capable of carrying out an activity by its own means.

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