Mergers and spin-offs: structural modifications and the FEAC tax regime

A structural modification is an operation that alters the patrimonial or personal structure of the company beyond a simple change of bylaws: the company joins another, divides itself or transfers all its assets as a block. Since 29 July 2023 these operations are governed by book one of Real Decreto-ley 5/2023, de 28 de junio, which repealed the old Ley 3/2009 and transposes Directiva (UE) 2019/2121.

The rule regulates transformation, merger (articles 33 to 57), total spin-off, partial spin-off and segregation (articles 58 to 71) and the global assignment of assets and liabilities (articles 72 to 79), both in internal and cross-border operations. All share a common processing trunk: project, reports, publicity, general meeting agreement, deed and registration (articles 4 to 16).

Choosing the right type of operation conditions the cost, deadlines and taxation. Managora analyses your case, proposes the appropriate structure and manages the entire file with a tailored quote: you can see the details in the Comprehensive Management of Structural Modifications file.

The axis is the common structural modification project (article 4), drafted and signed by the administrators of all the companies involved: it identifies the companies, sets the exchange ratio, the calendar, the implications for workers and the guarantees offered to creditors.

The project is accompanied by the report of the administrative body (article 5), with a section for partners and another for workers, and, when appropriate, the report of an independent expert (article 6), appointed by the Commercial Registry, who rules in particular on the exchange ratio and the adequacy of the guarantees offered to creditors. In a merger, a balance sheet is also required: the last annual balance sheet is valid if it was closed within the 6 months prior to the project; otherwise, a specific one must be prepared (article 43).

All this is subject to preparatory publicity (article 7): the project is deposited in the Commercial Registry or published, at least 1 month before the general meeting that approves the operation. Then the general meeting of each company decides (article 8); if all partners agree unanimously, the procedure is simplified (article 9), just as in the absorption of 100% owned subsidiaries, where there is no exchange.

Not in the classic sense. The old right of opposition of Ley 3/2009, which allowed stopping the operation until obtaining guarantees, disappeared with RD-ley 5/2023. Today creditors have the right to obtain adequate guarantees (article 13): it protects those who have credits born before the publication of the project and not yet due.

If the creditor is not satisfied with the safeguards offered in the project, they have 1 month from its publication (3 months in cross-border operations) to go to the Commercial Registrar and request guarantees; the Registrar can rely on an independent expert to assess their adequacy (article 14) and the discrepancy can end up in the Commercial Court. The practical key: the operation is not paralysed by this, and the administrators complete the protection with a declaration on the financial situation of the company (article 15).

In a spin-off there is an additional net: the beneficiary companies are jointly and severally liable for previous debts that remain unfulfilled, up to the limit of the net assets each received; if the spun-off company survives, it responds up to the limit of the net assets it kept. The deed of the operation includes the statement on the protection of creditors and, where appropriate, the guarantees provided.

FEAC is the tax neutrality regime of chapter VII of title VII of Ley 27/2014 (the Spanish Corporate Income Tax Act) (articles 76 to 89), applicable to mergers, spin-offs, asset contributions and exchange of securities. Its effect: the latent capital gains of the transferred elements are not integrated into the taxable base of either the companies or the partners at the time of the operation.

It is not an exemption, it is a deferral: the acquiring entity receives the assets with their historical tax values and acquisition dates, subrogates to the tax rights and obligations of the transferor (including negative taxable bases, with the limits of article 84 LIS) and taxation only surfaces if it is transferred to third parties in the future. The regime applies by default, unless expressly waived in the communication to the AEAT (article 89.1 LIS).

Neutrality also reaches indirect taxation: restructuring operations are not taxed under the corporate operations modality and are exempt from onerous property transfers and documented legal acts (article 45.I.B).10 of the texto refundido del ITPAJD), they do not accrue plusvalía municipal (the local tax on the increase in value of urban land) (second additional provision of the LIS, with exceptions for land contributed outside a branch of activity) and the transfer of an autonomous economic unit is not subject to VAT (article 7.1º of Ley del IVA (the Spanish VAT Act)).

Article 89.2 LIS is the anti-abuse clause: the regime does not apply when the main objective of the operation is tax fraud or evasion, in particular when there are no valid economic motives such as the restructuring or rationalisation of activities. The DGT has accepted as valid, among others, simplifying the structure and administrative costs, centralising management, achieving economies of scale or reinforcing the solvency of the group.

The Administration can check the operation years later, but recent jurisprudence has greatly limited its effects. The Supreme Court already pointed out (judgment 1503/2022) that deferral is inherent to the regime and is not the prohibited advantage. The TEAC, in resolutions of 27 May 2024 (RG 6513/2022 and 6550/2022), established that if the valid economic motive is missing, only the abusive tax advantage is eliminated, and as it materialises (for example, when distributing dividends after contributing shares to a holding company), not the entire deferred capital gain; subsequent doctrine of the TEAC itself clarifies that the reinvestment of those dividends in the activity can exclude abuse. And the Supreme Court judgment of 20 July 2026 (rec. 6518/2023) confirms a principle of proportionality: the regularisation must be limited to the advantage identified as abusive, with reinforced motivation, also in operations subject to the old TRLIS.

The practical lesson: the economic motive is documented before executing the operation, not when the check arrives. That is why the Managora service includes a valid economic motive report that proves the organisational and economic reasons for your restructuring; you have it in the FEAC Regime Communication and Valid Economic Motive Report file.

Although the FEAC regime applies by default, reporting the operation to the tax Administration is mandatory (article 89.1 LIS and articles 48 and 49 of the Reglamento del IS, RD 634/2015). The acquiring entity submits the communication; if it is not resident in Spain, the obligation passes to the transferor.

The deadline is 3 months from the registration of the public deed of the operation; if registration is not necessary, it is counted from the date the public deed or equivalent document is granted (article 48.2 RIS). It is submitted electronically at the AEAT headquarters, which has a specific procedure enabled since June 2023, with the content of article 49 RIS: identification of the entities, description of the operation and copy of the deed, in addition to indicating whether the regime is waived.

Not communicating on time does not cause the loss of the deferral, but it constitutes a serious tax infringement sanctioned with a fixed fine of €10,000 for each unreported operation. It is an expensive and easy mistake to avoid: Managora submits the communication for you within the deadline and accompanies it with a valid economic motive report that documents the operation and serves as evidence in the event of a future check.