Doctrine by topic · DGT Observatory
How the DGT's position on this topic has evolved, and the rulings it rests on.
Current position
The loss of the status of dominant entity does not automatically extinguish the tax group if the new dominant entity is a non-resident, maintaining the group number and requiring the designation of a representative entity in Spain. In the event that the integration of subsidiaries into a new group is partial following the loss of dominant status, the extinction of the group is applied according to article 74.1 of the LIS (Corporate Income Tax Law). This requires the distribution of net financial expenses, reserves, and negative tax bases according to the previous participation.
The DGT's position remains constant regarding the continuity of tax groups when the dominant entity becomes a non-resident, ensuring the preservation of the group number. The doctrine has focused on the preservation of legal personality in the face of entity transformations and on managing the transition of dominance. No changes in criterion are observed, but rather a coherent application of the regulations on continuity and partial extinction.
Turning points
Specifies that if the integration into a new group after losing dominant status is partial, the group extinction of article 74.1 of the LIS applies for the distribution of tax elements.
Analysis based on 8 of 9 rulings with a stated position. Updated 30 September 2026.