Until January 1st, 2015 Spanish tax legislation was quite discriminatory in relation to inheritance tax and donations, forcing non-residents with properties in Spain to abide by state law, while residents could abide the law of the Autonomous Communities, which is much more advantageous to the taxpayer.
The European Commission has been asking the Government of Spain since 2011 to make amends whiting legislation in a rather friendly way, but facing no response from our government the European Comission decided to take more effective action and sue the Spanish Government in the Court of Justice who ended this incongruity in our legislation last September 3rd, 2014 and I say incongruity because, as we all know, the European space exists, among other objectives, to create an area of free capital movement (art. 40 of the Agreement European Economic Area – EEA) law that Spain was missing.
It is clear that the discrimination alleged by the Commission does not lie in the differences between tax legislations of the Autonomous Communities and/or the State, but in particular the fact that a person living in an Autonomous Community may have access to exemptions or bonuses offered by this, while another person from the same Community does not have access to these benefits for being a non-resident, even if that person has Spanish nationality (hence, today we have many cases of Spaniards living abroad and can be Spanish – by this means non residents)
It is true that the abovementioned tax distinction still exists for those who are non-EU residents. What does this mean? For those non-EU citizens, even, again, those being of Spanish nationality, but resident in non-European countries, such as United States, Argentina and Mexico continue, and will continue being affected by this irrationality in our legislation given the laxity with which our government operates. The positive side is that at least, thanks to Europe, we have largely reduced the number of affected people since from the first of January of this 2015 Residents and European Non Residents will be governed by the tax legislation that applies to you as applicable in specific situations, but on equal terms.
In any case if you are aware of accepting an inheritance and have questions about what would be the fiscally most advantageous way to do it, feel free to consult with experts on taxation that you can find in DAEMI ZABALZA & ASSOCIATES
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