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Justice is served for foreigners inheritance tax in Spain

Everyone is Equal in Marbella

They’re not getting away with it anymore!

As it turns out Spain has been getting away with discrimination against Non Residents and it is contrary to the EEA Treaty. (European Economic Treaty). They have now been called to justice.

Inheritance Tax in Spain for Non Residents along with Gift Tax will be handled equally from this point on. Good news for Property owners and maybe some collateral damage for those who have been treated unfairly in the previous 4 years.

Spain Inheritance Tax Changes

Until this point Spanish Residents have been handled by Regional Government and Non-Residents have been given the tougher route, having been referred to State Government. At this level the conditions and amount taxed is much higher.


Spain were given fair warning back in 2011 and in 2012 by the European Commission to make the necessary changes to their legislation as it was contrary to the law. They chose to ignore this warning and were sued back in January 2014. The final decision ruled against Spain on 3rd September 2014.

Under articles 63 EU and 40 of the EEA Treaty it appears Spain has been denying the freedom of capital within the European Union (EU) and European Economic Area (EEA).

So the Government said ‘YES’ to the Draft Laws based on both Personal (IRPF) and Non-Resident Income Tax (IRNR) on the 1st August 2014 and it is now in the hands of Parliament for any amendments needed to be made.

They had to say ‘Yes’ surely; they were already breaking rulings of the European Economic Treaty (EET). They are one of the 28 Members of the European Court Justice (ECJ) and this is the highest court ruling of the Union. Cases are usually brought forward to them from the European Union (EU).

Spain will have no room for appeal and they may well see themselves in court with Non Spanish Residents lining up to claim back overpaid taxes. The enforcement made by the European Court of Justice did not enforce the refunding of overpayment, but who can argue those who will choose to pursue this unlawful injustice.

Current laws for Inheritance Tax refund must be made within four years of payment. If you have been part of this injustice then you should pursue it.


Considering 12% of Spain is of Non Resident Population it’s not difficult to see the resentment of the previous situation. Regional Governments have set in place many bonuses and deductions for their own Residents and Foreigners have been exempt from these privileges. Does it seem fair that depending on the Region you live would determine how much tax you pay? Absolutely not, this is a system in Spain that surely in the name of economic progression equality and fairness should be abandoned.

There has always been uncertainty regarding Spanish Inheritance Law, they have created a complicated structure of tax, deductions and bonuses.


There are currently IV Groups and you will be taxed according to the Group you fall into. The level of Succession Tax (ISD) you pay is determined by your relationship to the deceased.

Another factor is the Autonomous Community (AC) you reside, good news for people of Andalucía, spouses and children are exempt from inheritance tax between the sum of €175,000, and €402,678. That is if you have been resident for more than 5 years.

For an insightful guide you can visit Anglo Info’s guide to General Taxes & Inheritance Tax.

Just remember you have 4 years to state your claim on any overpayment you have made.


Published in Costa del Sol Property News |