1. Reduced 15% rate and newly created entities: membership of an international group as an independent ground for exclusion.
The Directorate-General for Taxation (DGT), in Binding Ruling V0979-26 of 5 May 2026, analyses the application of the reduced 15% Corporate Income Tax (CIT) rate provided for in Article 29.1 of the Corporate Income Tax Law (LIS) to a Spanish limited liability company incorporated in 2021 and forming part of an international group engaged in the marketing of fuels. The group structure was organised through a parent company resident in Latvia, which held 99.95% of a Polish entity and 100% of an Estonian company; the latter, in turn, held 100% of the Spanish company making the enquiry. The Polish entity was already operating in Spain for VAT purposes, while the company making the enquiry carried out its own activity in Spain based on the wholesale purchase of fuel, logistics management, operation of fuel pumps and direct sales to business customers.
The issue in dispute was whether the activity carried out could be considered a newly created activity for the purposes of Article 29.1 of the LIS and, consequently, whether the company could benefit from the reduced rate applicable during the first two financial years in which it had a positive taxable base. In particular, it was necessary to analyse whether the activity constituted a continuation of another activity previously carried out by related entities and, additionally, whether membership of a corporate group, where the parent company was non-resident, was in itself sufficient to prevent the application of the tax benefit.
Based on the information provided, the DGT accepts that the activity of the company making the enquiry does not appear to be a mere continuation of the activity carried out by the Polish entity within the group. Although both operate in the fuel sector, there are substantial differences in their business models, the resources employed, the risks assumed and the infrastructure used. Accordingly, the circumstances provided for in Article 29.1(a) of the LIS would not arise, without prejudice to the fact that this is a question of fact that must be substantiated by any means of evidence admissible in law.
However, the ruling emphasises that exclusion on the grounds of group membership applies irrespective of the international dimension of the corporate structure. Although the parent company and the corporate structure are organised through non-resident entities and there are no other related companies in Spain, the company making the enquiry forms part of a single unit of control comprising related entities within the meaning of Article 42 of the Commercial Code. Consequently, the existence of a corporate group, even where it is international and is not required to consolidate in Spain, is in itself sufficient to prevent the Spanish company from being regarded as a newly created entity for the purposes of Article 29.1 of the LIS.
The ruling thus confirms that it is not decisive whether the economic activity is new or differs from that carried out by other entities within the group. The decisive factor is the existence of a corporate control relationship: if the company making the enquiry forms part of a corporate group, it is excluded from the reduced rate, without the need to establish succession to or continuity of a pre-existing economic activity.
The practical significance of this criterion is that group status supersedes the substantive analysis of the activity: even where the Spanish company has its own resources, assumes business risks and carries out a genuinely new activity in Spain, the tax incentive is unavailable if there is direct or indirect control within a corporate group structure, even where that structure is cross-border in nature.
In conclusion, Binding Ruling V0979-26 reiterates a strict interpretation of the tax concept of a newly created entity: membership of a corporate group constitutes an independent and sufficient ground for exclusion from the reduced 15% CIT rate, even where the group is international in nature and the activity carried out by the Spanish entity is new, genuine and distinct.
2. Application of the tax neutrality regime to transactions involving contributions of shareholdings to holding companies.
The Administrative Litigation Chamber of the Supreme Court (TS), in Judgment No. 949/2026 of 20 July 2026 (cassation appeal No. 6518/2023), addresses the appeal brought by a taxpayer against the judgment of the National Court (AN), which upheld the adjustment made by the Tax Inspectorate, determining that the special tax regime for mergers, divisions, contributions of assets and exchanges of securities (FEAC) was not applicable to a transaction involving the contribution of shareholdings to a holding company.
In the case under consideration, the Tax Administration took the view that the transaction lacked valid economic reasons since, in its opinion, its sole purpose was to obtain certain tax advantages, essentially lower taxation of dividends and a reduction in taxation under Wealth Tax and Inheritance and Gift Tax. On that basis, the Tax Inspectorate rejected the application of the special regime and subjected the capital gains arising from the contributions made to Personal Income Tax (IRPF).
The taxpayer, for its part, argues that the absence of valid economic reasons cannot automatically entail the complete disapplication of the FEAC regime and, in particular, the loss of the deferral of capital gains. In its view, the response to a transaction considered abusive should respect the principle of proportionality and be limited to neutralising the specific tax advantages improperly sought.
In the cassation appeal proceedings, the State Legal Service argues that Article 96.2 of the TRLIS, applicable to the case under consideration, provided for the disapplication of the special regime where the principal objective of the transaction was tax fraud or tax evasion, whereas the express possibility of eliminating only certain tax advantages was subsequently introduced by Article 89.2 of the LIS. Accordingly, in its view, the adjustment made was in accordance with the law.
After analysing both positions, the Supreme Court accepts the appellant’s argument and concludes that the principle of proportionality was already implicit in the anti-abuse clause contained in Article 96.2 of the TRLIS, interpreted in accordance with European Union law. Accordingly, the Supreme Court holds that the partial disapplication of the FEAC regime may only result in the elimination of the tax advantages abusively sought by the taxpayer, which must be identified in the tax assessment.
The Supreme Court further determines that the adjustment made by the Tax Administration may consist of eliminating the deferral of the capital gains arising from the contribution in kind made upon the incorporation of a holding company, thereby subjecting the taxpayer to tax on the latent capital gains arising from the transaction, only if the Tax Administration demonstrates, by means of enhanced reasoning, that obtaining the deferral was the principal objective pursued in carrying out the transaction. It concludes that such enhanced reasoning must, in all cases, include the identification of evidence clearly indicating that purpose.
Applying this doctrine to the specific case, the Supreme Court finds that the Tax Inspectorate had identified the reduction in the taxation of dividends and in wealth and inheritance taxation as the tax advantages sought, but had neither identified nor demonstrated that obtaining the deferral of the capital gains was the principal objective of the transaction. It therefore considers it inappropriate to subject those capital gains to immediate taxation merely on the basis of the finding that there were no valid economic reasons.
3. The Supreme Court clarifies the time limits applicable to cadastral inspection procedures.
On 21 July, the Supreme Court (TS) issued Judgment No. 953/2026 (Cassation Appeal No. 2149/2024), confirming that cadastral inspection procedures are governed by the time limits laid down in the General Tax Law and that failure to comply with those time limits does not automatically result in the expiry of the procedure.
The dispute arose from a cadastral inspection procedure initiated by a Territorial Cadastral Office on 10 November 2017, which concluded with the notification of a decision to amend the cadastral records on 28 March 2019.
At first instance, the High Court of Justice of Andalusia (TSJA) upheld the appeal brought by the taxpayer on the grounds that the procedure had exceeded the maximum period of six months established in the Third Additional Provision of the Consolidated Text of the Real Estate Cadastre Law (TRLCI), and therefore the procedure should be declared expired. The Administration lodged a cassation appeal against the aforementioned judgment of the TSJA on the grounds that it was contrary to law.
The main issue examined in the Supreme Court’s judgment is to determine which time limit applies to cadastral inspection procedures and the consequences arising from failure to comply with that time limit.
The Court distinguishes between two procedures which, although both seek to bring the cadastral description of properties into line with the existing reality, are subject to different legal regimes: on the one hand, the cadastral regularisation procedure (Third Additional Provision of the TRLCI), which establishes a maximum period of six months and expressly provides for the expiry of the proceedings where that period is exceeded; and, on the other hand, the cadastral inspection procedure (Articles 11 and 19 of the TRLCI), to which Article 150 of the LGT applies on a supplementary basis and which establishes, as a general rule, a period of 18 months.
In this regard, it should also be noted that Article 150.6 of the LGT provides that, in inspection proceedings, failure to comply with the maximum duration does not result in the expiry of the procedure, which will continue until its conclusion.
In its judgment, the Supreme Court reiterates its own case law (Supreme Court Judgment 1395/2025 of 31 October), confirming that cadastral inspection procedures are subject to the time regime laid down in Article 150 of the LGT and that the expiry of that period does not, therefore, result in the expiry of the procedure. Consequently, the Supreme Court upholds the appeal brought by the Administration and sets aside the judgment of the TSJA, ordering the proceedings to be remitted so that the latter may rule on the remaining grounds of challenge raised by the taxpayer.
