Spain’s inheritance and gift tax rules to be reviewed by the EU Court of Justice

The European Commission has referred Spain to the EU Court of Justice following its conclusion that Spain’s inheritance and gift tax rules (which require non-residents to pay higher taxes) are discriminatory. The current rules, the Commission has concluded, are in breach of the Treaty on the Functioning of the EU as they present an obstacle to the free movement of people and goods.

As the rules governing inheritance and gift tax currently stand, resident taxpayers benefit from significantly lower tax liabilities than non-resident taxpayers.

Should the EU Court of Justice rule that these Spanish taxes are indeed discriminatory, Spain would have to revise them, meaning that non-residents could be entitled to a substantial refund of the additional tax paid.

If you are non-resident in Spain, or feel that this could affect you, please contact our Spanish office for a confidential discussion. Our tax experts are bi-lingual and can advise on all tax aspects affecting residents and non-residents.

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