BackA DGT report clarifies that the previous Corporate Tax Act already allowed the partial non-application of the FEAC regime (regime for mergers, spin-offs, non-monetary contributions and exchange of securities).
This previous law was not at all precise on this aspect, and its literal interpretation could lead to the conclusion that, if there was no legitimate economic justification, the Inspectorate should completely annul the special regime. According to this approach, the general regime should be used for the restructuring operation, which would result in the taxation of all capital gains that had been postponed thanks to the FEAC regime.
In the current regulation, article 89 of the Corporate Tax Act is clearer: if a restructuring has no legitimate economic justification, the Administration should only eliminate the tax benefits obtained and not modify the FEAC regime used by the taxpayer in other aspects.
The reality of the previous law was reflected in a Report of the General Directorate of Taxes in 2005, which concluded that the partial withdrawal of the regime was valid. This means that it was recognized that completely eliminating the special regime of the operation and applying the general regime is not an automatic process, since the Inspection must identify the tax advantage obtained and withdraw it exclusively. This is valid, as we say, both for the current Law and for the previous Revised Text.
The problem is that this old Report was not available to the taxpayer as it was of an intern nature. Now the Transparency Law has made this document a public report, so it is available to anyone interested.
This report can be an important tool to challenge the routine regularization process that the Inspection carried out automatically.
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