European Court judgement against Spanish Inheritance and Gift Law


The European Court judgement against Spanish Inheritance and Gift Law.

The European Court Sentence (TJUE 03/09/14) confirms the discrimination between European residents and non-residents in Spain, because of the different taxation treatment in Inheritance and Gift Law, discrimination which infringes upon the Rules of the European Law.

Basically it comes to this, Spain is condemned for allowing, at the discretion of its regions, to establish different Inheritance Tax rules making the tax treatment extremely  discriminatory, in terms of payment, just for being or not resident in a particular area.

That discrimination makes a strong restriction in the free movement of people and capital in the European Union, one of the fundamental principles of its constitution.

An example of the taxes in the current situation, a person who inherits in Valencia Region, as non resident, 100.000,- € from his parents, is paying more than 12.000,- € on inheritance taxes more than a resident would in the same situation.

The new scenario will obligate Spain to change the Tax Inheritance Law according to the European Court judgement, but does not mean that those who already paid the tax and being discriminated, will recover the difference on taxes, it will be necessary an individual judicial claim to prove the discrimination getting the right, through a positive judgement, to get that money and its legally set interest back from the Spanish tax office. This court procedure of course costs money on court fees and lawyer fees, so each case needs to be individually revised to see if it is worth taking it to court.

Thanks again the European Court for mitigate the profit motive of the Spanish Government.

The European Court judgement against Spanish Inheritance and Gift Law.

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