Judgment Court of Justice of the Europan Union and adaptation of the Spanish Inheritance and Donation Tax Law, for non residents
The Judgment of the Court of Justice of the European Union dated 3rd September 2014, Case C-127/12 (http://curia.europa.eu/juris/document/document.jsf?docid=157285&doclang=ES) states contrary to the principle of free movement of capital, the different tax treatment of donations and inheritance between inheritors and donees residents and non-residents in Spain, between grantors residents and non-residents in Spain and between donations and similar provisions of Real Estates situated in Spain and outside.
The judgment does not refer to the powers attributed to the Autonomous Communities (generally with a more favourable fiscal impact to the taxpayer), but rather to national legislation which was applicable to non-residents in this matter.
By Spanish Law 26/2014 of 27 November (published in the Official Gazette of 28th November 2014), is adjusted the legislation of Inheritance and Donations (Law 29/1989) to the premises stated in the Court of Justice of the European Union.
Focusing on inheritance assumptions, which are those most frequently, resolved in Arcos and Lamers Asociados, the adaptation of national law to European judgment will mean the following:
- In the event of acquisition of goods and rights by inheritance, legacy or any other Title of succession if the deceased had been resident in a Member State of the European Union(1) or European Economic Area(2), other than Spain, the taxpayers are entitled to the application by the regulation approved by the Autonomous Community where the highest value of the assets and rights of the estate located in Spain are. If there were not any good or right located in Spain, shall apply to each taxpayer with the rules of the Autonomous Community in which he resides.
- In the event of acquisition of goods and rights by inheritance, legacy or any other Title of succession, if the deceased had been resident in one Autonomous Communities, non-resident taxpayers who are resident in a Member State of the European Union or the Space European Economic shall be entitled to the application by the regulation approved by that Autonomous Community.
To these effects, it is understood that the Spanish residents, are resident in one Autonomous Community when they remain a greater number of days in the period of the five previous years, counted from date to date, that finish the day before of the taxable date.
This adaptation of the Law of Inheritance and Donations to the judgment of the European Court is important, so that the Spanish Tax Authorities should update the appropriate tax forms as at 1st January 2015, due to the fact that presently the autonomous bonuses are not included in the current tax forms.
At our Spanish law firm in Marbella, Málaga, Spain, Arcos & Lamers Asociados, we have a team of experts to advise you on the process of Inheritance matters and the settlement of the corresponding Spanish Inheritance taxes. Ensure your peace of mind!
(1).- Germany, Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Slovakia, Slovenia, Spain, Estonia, Finland, France, Greece, Netherlands, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, United Kingdom, Czech Republic, Romania, Sweden.
(2).- Iceland, Liechtenstein, Norway.
Féliz Ruiz, lawyer in Marbella.
- Inheritance Marbella, Non Residents in Spain, Spanish Inheritance Tax, Spanish Will, Tax Advice Marbella,