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Inheritance and gift tax that require non-residents to pay higher taxes than residents

The Commission had already formally requested Spain on 5 May 2010 and additionally on 17 February 2011 to take action to ensure compliance with the EU rules in regard to inheritance and gift tax provisions. However, no amendments have been made to Spanish legislation on the matter.

Inheritance and gift tax in Spain are regulated at both state level and at the level of autonomous communities. The autonomous communities' legislation grants residents a number of tax benefits that, in practice, allow them to pay much lower taxes than non-residents.

The Commission considers that this discriminatory tax treatment constitutes an obstacle to the free movement of people and capital, fundamental principles of the EU's Single Market.

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.

Published on our website on November 4, 2011