Tax neutrality in mergers by absorption: requirements to avoid capital gains integration

Corporate reorganizations represent a key tool for managing business structures. However, the tax impact of these operations, especially regarding the integration of capital gains, is a constant concern for companies seeking to optimize their structure without generating immediate tax burdens.

What the DGT has ruled

The inquiry focuses on determining whether the special regime for mergers, spin-offs, asset contributions, exchange of securities, and change of registered office provided for in Law 27/2014 on Corporate Income Tax is applicable. The point of debate was whether the absence of accounting revaluation of assets, due to the tax value coinciding with the accounting value, prevented access to this tax neutrality regime.

The analysis is based on current regulations, including the amendments introduced by Royal Decree-Law 5/2023. The core of the issue lies in whether the lack of difference between the accounting and tax value of the assets constitutes an obstacle to opting for tax neutrality treatment in a merger by absorption.

What it means for you

This ruling confirms that it is possible to carry out corporate reorganizations without capital gains being integrated into the Corporate Income Tax (IS) taxable base. The key lies not only in the existence of a difference between values, but in compliance with the legal and commercial requirements established in the regulations.

For companies, this implies that they can execute merger processes without an immediate taxable event occurring from the delivery of assets, provided that the operation complies with the provisions of the Corporate Income Tax Law and is justified by valid economic reasons.

What should be done

In the event of a merger or reorganization operation, it is necessary to verify that the requirements of Law 27/2014 are strictly met. It is essential to prove the existence of valid economic reasons that justify the operation beyond mere tax optimization. It is recommended to analyze the situation of the assets and the corporate structure to ensure that tax neutrality can be safely applied within the context of the planned operation.