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V5453-26 7 August 2026 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · neutralidad fiscal

Merger by absorption of a subsidiary may qualify for tax neutrality if valid economic reasons exist

A company seeking advice proposes absorbing its wholly-owned subsidiary to improve operational efficiency. The DGT rules that the transaction may qualify for tax neutrality provided it meets the requirements of the Corporate Income Tax Act (LIS) and its primary objective is not tax fraud or evasion.

The question raised

Whether the special tax regime provided for in Law 27/2014, of November 27, on Corporate Income Tax is applicable to the projected merger operation due to it being carried out for valid economic reasons.

The DGT's ruling

If the merger is carried out within a commercial scope and complies with Article 76.1.c) of the LIS, it may qualify for the tax neutrality regime. This allows for the maintenance of the values and the seniority of the assets of the absorbed entity. However, the regime shall not apply if the primary objective is tax fraud or evasion, or if a spurious tax advantage is sought. The existence of tax loss carryforwards does not in itself invalidate the regime, provided that the predominant purpose of the operation is not the exploitation of said credits.

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