The judgment of ECJ states that the Spanish Inheritance and Gift Tax Act (IHT) breaches the EC Law principles since it treats in a discriminatory manner inheritors non- residents in Spain.
This discriminatory tax treatment implies that non-residents are not allowed to apply the tax benefits introduced by various Spanish Autonomics Governments which are exclusively applicable to the Spanish residents. This entails that, on the occasion of an inheritance, non-residents could be taxed at a maximum rate of 34% while Spanish residents would be taxed at 1%.
The judgement allows European residents which have paid the Spanish IHT to recover the amount overpaid by starting a procedure before the Spanish Tax Office.
The deadline to begin the procedure would be no later than four years since the IHT was effectively paid.