23 Jul NON-RESIDENT EUROPEAN CITIZENS MAY REQUEST OVERPAID ON INHERITANCE AND DONATIONS TAX IN SPAIN

In September 3, 2014 the Court of Justice of the European Union ends with the discrimination that non-residents European citizens were suffering in Spain when paying Inheritance and Donations Tax in Spain. This judgment understands that Spain violates free movement of capital by treating differently to resident to non-resident when an inheritance or donation pay taxes. This important CJEU resolution forced Spain to amend legislation to prevent discrimination between taxpayers, so the government finally amend the Law relating to non-resident Personal Income Tax through Law 26/2014, of November 27, 2014, law that went into force in January 1, this year 2015, in which has been introduced 3rd additional disposition that adapts the tax rules as provided by CJEU judgment.

This legislative alignment causes taxpayers who have already paid the taxes applying state law (always more burdensome than regional law) without being able to apply tax deductions of each autonomous community, with which assets have a connection point, may start proceedings to recover the sums overpaid to Tax Authorities, procedure in which Navarro Llima Abogados, S.L. has experience.

The truth is that the tax burden in the autonomous Law is lower than in the State, so studying the concrete case and attending the composition of inheritance taxes that were paid, will make possible for non-resident to recover this amounts overpaid.

Some requirements to claim the returns with full guarantees are: must have paid Inheritance and Donation Tax in Spain, must have not paid Personal Income Tax in Spain, and finally tax hasn’t prescribed.

Time is against taxpayers because of claim deadlines. If you find yourself in this situation do not hesitate to contact us. You can ask for budget under no obligation.

Spanish Tax Authorities will have to face big payments claimed by affected taxpayers, specially affecting community non-residents in “parent to son” inheritance, where biggest autonomic tax reliefs appears.

Jaime J. Navarro
Attorney