Special regime for mergers, splits, contributions of assets and exchange of securities

Have you thought about restructuring your company? If your answer is affirmative, you should know the special regime for mergers, splits, contributions of assets, and securities exchange. We tell you all the details in this article.

Where is it regulated, and why is the special regime applied?

The special regime for mergers, splits, contributions of assets and securities exchange is regulated in articles 76 and following the Corporation Tax Law.

This regime aims to ensure that when a company carries out a restructuring, the taxation of the operation does not influence the company’s decision, but rather that said decision is made based on economic reasons.

Ultimately, the special regime supposes a deferral of the taxation of the income revealed with the operation.

What requirements must be met to apply the special regime?

The special regime applies in any case unless the taxpayer expressly chooses not to take advantage of it; however, for it to be applied, a series of requirements must be met, which are the following:

• The restructuring operation must fit one of the definitions established by law. In this sense, the following concepts are regulated:
  • Fusion. It is an operation in which one or more entities transfer their assets en bloc to an existing or new third party.
  • Excision. An entity divides its assets into two or more parts and transmits them to two or more existing or new entities. It may also be that an entity segregates one or more parts of its assets that form branches of activity and transmits them to one or more newly created or existing entities.
  • Non-monetary contribution of a branch of activity. It is the operation by which an entity contributes one or more branches of activity to another newly created or existing entity, receiving in exchange values ​​of the acquiring entity’s capital stock.
  • Exchange of securities. It is the operation by which an entity acquires a participation in the capital stock of another that allows it to have the majority of the voting rights in it or to have greater participation.
• The operation must be communicated to the Tax Agency.
• The operation cannot be a fraud or tax evasion.

It is essential to comply with all the requirements established by law to achieve deferral of taxation. In this sense, the Tax Agency carefully analyzes each case to check that all the requirements are met, so it is important to have the help of an expert tax advisor who:

• Analyse your case.
• Check if you can meet the legal requirements.
• Make the communication to the Tax Agency.
• Advise and support you before any verification that the Tax Agency wants to carry out.

Ultimately, it is important to analyse each situation and see the implications that it may have.