Tax neutrality in partial demergers: requirements and economic motives

The application of the special tax regime in partial demerger operations requires strict compliance with current regulations to guarantee tax neutrality. The Directorate General of Taxes (DGT) has addressed the question of whether the projected operations comply with the necessary legal precepts to avoid the inclusion of capital gains in the taxable base of the companies involved.

What the DGT has ruled

The analysis focuses on confirming that the projected demergers comply with the requirements established in Chapter VII of Title VII of the Corporate Income Tax Law (LIS). A key point of the ruling is the consideration of the economic motives alleged by the entity. The administration must verify that such motives are valid in accordance with the provisions of Article 89.2 of the LIS, thereby allowing for the application of the special tax neutrality regime.

What it means for you

For companies considering a restructuring through a partial demerger, this criterion underscores the importance of the economic substance of the operation. Formal execution of the demerger is not enough; it is imperative that the operation is backed by valid economic motives that justify the restructuring. If these requirements are not met, the capital gains derived from the transfer of assets could be directly included in the taxable base, generating an immediate tax burden that the special regime seeks to avoid.

What should be done

In the event of such an operation, it is necessary to perform a detailed analysis of the documentation supporting the business decision. It must be ensured that the alleged economic motives have a solid basis and are consistent with the reality of the company's activity. Since the validity of tax neutrality depends on the correct application of the LIS and Royal Decree-Law 5/2023, it is fundamental to assess each case individually to ensure that the demerger structure complies with current regulations.