The Directorate-General for Taxes (DGT), in binding ruling V-0127-26 of 27/01/2026, considers that the total demerger (split-up) of an asset-holding company aimed at simplifying succession and facilitating generational handover responds to a valid economic reason for the purposes of article 89.2 of the Corporate Income Tax Act (LIS) and could, in principle, qualify for the special tax-neutrality regime of Chapter VII of Title VII, commonly known as the FEAC regime. Since the shares are allotted proportionally, the transferred assets need not constitute branches of activity (art. 76.2.2 LIS). The doctrine rests on the Supreme Court’s case law (judgments 2508/2016 of 23/11/2016 and 1503/2022 of 16/11/2022), which accepts business objectives other than restructuring and rationalisation provided they are connected with the purpose of the regime, namely enabling the continuity and development of the business activity, and on the CJEU’s Euro Park Service judgment (case C-14/16, 08/03/2017), which rules out general presumptions of tax evasion or avoidance and requires a case-by-case examination.
The practical consequence admits an operational caveat. The characterisation as a valid economic reason may be compromised if the demerger is followed by operations showing that the restructuring was not the real objective but an instrumental step towards another tax advantage: immediate transfer of the shares received to a third party, dissolution or liquidation of the beneficiary companies shortly after the demerger, or any other movement suggesting that the neutrality of the FEAC regime has been used spuriously. It is therefore advisable to plan the operation with a reasonable horizon of continuity and to document contemporaneously the succession purpose that justifies it.
Full analysis in → The total division to facilitate generational handover is a valid economic reason for the purposes of the FEAC regime of the Corporate Income Tax
https://spanishtaxjournal.com/en/2026/01-27/nota-total-division-generational-handover/