EU court rules against Spain over discriminatory Inheritance Tax
The judgment of the Tribunal of Justice of the European Union states that the Spanish Inheritance and Gift Tax Act (IHT) breaches the European Community Law principles since it treats in a discriminatory manner inheritors non-residents in Spain.
The above mentioned judgement allows European residents which have paid the Spanish IHT to recover the amount overpaid by starting a procedure before the Spanish Tax Office.
This discriminatory tax treatment implies that non-residents were not allowed to apply the tax benefits introduced by various Spanish Autonomics Governments which were the exclusively application to the Spanish residents. For instance, on the occasion of an inheritance, a non-resident was taxed at a maximum rate of 34% while a Spanish resident was taxed at 1%.