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Practical Handbook for Companies 2021

Box 00030 Transfer of assets, Articles27.2.d) and 77.1 LIS

This box should be ticked by those entities which in the period covered by the tax return must tax income derived from the subsequent transfer of assets and liabilities existing at the time of the transformation of the corporate form or modification of the statute or legal regime of the entities under the terms set out in article 27.2 d) of the LIS, or at the time of the execution of the operations set out in article 76 of the LIS (merger, spin-off, contribution of assets, exchange of securities and change of registered office of a European Company or a European Cooperative Society from one Member State to another of the European Union), in accordance with the provisions of article 77.1 of the LIS.

Remember:

Article 27.2 d) of the LIS states that income derived from the subsequent transfer of assets and liabilities existing at the time of the transformation of the corporate form or modification of the status or legal regime of the entities shall be deemed to have been generated on a straight-line basis, unless there is evidence to the contrary, during the entire time the transferred asset is held.The portion of such income generated up to the time of the transformation or modification shall be taxed at the tax rate and under the tax regime that would have applied to the entity had it retained its original form, status or regime.

Article 77.1 of the LIS establishes that in mergers, spin-offs, contributions of assets, exchanges of securities and changes of registered office of a European Company or a European Cooperative Society from one Member State to another Member State of the European Union, when the acquiring entity benefits from the application of a different tax rate or special tax regime from the transferor, the income derived from the transfer of assets existing at the time of the transaction, carried out after the transaction, shall be deemed to have been generated on a straight-line basis, unless proven otherwise during the time the transferred asset is held.The portion of such income generated up to the time of completion of the transaction shall be taxed at the tax rate and under the tax regime that would have applied to the transferring entity.