Spanish Inheritance and Gift Tax are unfair and discriminatory. New evidence: a German precedent.

For a long time, we have aired our belief that the Spanish Inheritance Tax and also the Gift Tax are both unfair and completely discriminatory, not only against European Citizens Non Tax Resident in Spain, but also tax residents, as depending where you live, in Alicante or in Murcia, in Madrid or Barcelona, your tax bill could differ significantly.

From our point of view, without question, these kind regulations are against European legal principals of free movement of capital and people, which are essential to the concept of European Union.

On the 17th of October, the third chamber of the Court of Justice of the European Union (CJEU) granted a court order, regarding an appeal presented by a Swiss national and tax resident in Switzerland against the German tax authorities.

Similar to Spain, it seems German tax rules foresee a tax reduction for Inheritance Tax (IHT) much higher for tax residents there, than for non-tax residents. As in Spanish inheritance tax law, in practice that means a discrimination against non residents heirs, who normally would end up paying more IHT than if they were residents.

Therefore the CJEU understands, as we ourselves have said, that these kind of tax differences, are in fact a clear discrimination against the basic principles foreseen in articles 56 and following ones, of the European Union Treaty, such as the free movement of capital, etc.

As we have informed our readers on many occasions, Spain is waiting for this same tribunal to decide a court case started by the European Commission against Spain’s tax rules and laws on succession and inheritance. We hope and believe that the tribunal will rule in the same way as the court order above mentioned.

Therefore, if you or a deceased are NON TAX RESIDENT, and if as heir or beneficiary as per the Spanish Law you are required to pay much more inheritance or gift tax than a resident in Spain, then legally you should know that you now have good options to make a claim to pay the same tax as if you were resident. And if you have already paid inheritance tax, our office could help you to claim them back, all over Spain. 

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The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer)
White & Baos
Tel:+34 966 426 185
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