Legal tip 455. Spain for lower IHT to foreigners
Friday, February 18, 2011 @ 8:39 AM
The European Commission is requesting Spain no to apply higher IHT to non-residents foreigners and foreign-based assets. Brussels believes that these provisions are incompatible with the free movement of workers and capital guaranteed by the Treaty.
The request takes the form of a “reasoned opinion”. If the Spanish authorities do not give a satisfactory reply within two months, the case could end up before the Court of Justice in Luxembourg.
The EU executive claims that in Spain, both the State and the regions (Comunidades Autónomas) legislate IHT. In practice, regional IHT laws are much softer than national ones. National Law applies when the recipients live abroad or the inherited/ gifted asset is located outside Spain. As a result, taxpayers have to pay more taxes than if they lived in Spain or if they were to donate property in that country," the Commission reports.
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