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11.2. Tax Consequence of Business Emigration, Corporate Inversions and the Cessation of Business

Under Article 26 of the CITL, if a company transfers its residence abroad, the tax year ends and exit tax applies (see Sec. 13.5.). The same happens when a permanent establishment of a foreign company ceases its activities or, otherwise, when elements which were allocated to the permanent establishment are transferred abroad or when the permanent establishment is sold.

With regard to the change of domicile of a Societas Europaea (European Company) from one EU Member State to another, the provisions applicable in the case of mergers (see Sec. 11.) will apply to the assets located in Spain (neutrality or tax deferral), as long as the assets remain connected to a permanent establishment in Spain.