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Home News Taxes of succession and donations in Spain: changes for French taxpayers -DROIT ET PATRIMOINE nº245-

Taxes of succession and donations in Spain: changes for French taxpayers -DROIT ET PATRIMOINE nº245-

JAN 31 / 2019

Taxes of succession and donations in Spain: changes for French taxpayers -DROIT ET PATRIMOINE nº245-

Taxation of assets and donations in Spain: "Changes for French taxpayers"

This article points out the consequences of the judgment of the Court of Justice of the European Union of September 3, 2014 on the Spanish tax paid by French taxpayers with respect to an inheritance or donation of Spanish property, particularly in terms of liability. of the Spanish State.

I - Introduction - Spanish taxation of goods and donations.

For a long time, the Spanish State and its regional governments, known as "autonomous communities" (1), share a series of prerogatives with respect to personal taxes (2), in particular on income and wealth (3) as well as in inheritances and donations (4).

In the case of taxes on inheritances and donations, this division operates as follows.

The State (5) has exclusive jurisdiction to determine the imputable event, the cases of non-liability and exemption and the rules and methods to calculate the tax base.

In addition to the collection and management of taxes, the Autonomous Communities (6), since January 1, 2002 (7), have been able to complement and replace some of its aspects, such as taxes, surcharges and allowances, as well as reductions and redress. applicable to patrimonies, donations and life insurance with certain links with their territories, such as the residence of the deceased for estates and life insurance, the location of donations of real estate and the residence of the donee for donations of other goods and rights.

In terms of inheritance and donations, seventeen different regional tax regimes coexist with the general system.

However, this situation proved to be discriminatory in the case of farms and donations that have a deceased person or a donee who resides abroad for tax purposes or movable or immovable property outside of Spain.

For these inheritances and donations, the general scheme was applied automatically (8). This scheme is less advantageous than most regional plans.

For example, the application of some of these plans could represent a fiscal saving of 99% compared to the national plan (9).

II. The judgment of the Court of Justice of the European Union of September 3, 2014.

Taking into account the discriminatory nature of the Spanish tax system, the European Commission decided to file an appeal against the Spanish State for violation of the principles of free movement of capital and movement of persons recognized by the Human Rights Treaty. The operation of the European Union (TFEU) and the Agreement on the European Economic Area (EEA) (10).

In its judgment of September 3, 2014 (11), the Court of Justice of the European Union gave the Commission a partial reason (12).

Dismissed the complaint made by the Commission about an alleged infringement of the Spanish tax system with the free movement of persons recognized by the TFEU and the EEA Agreement.

By declaring: "Furthermore, since the Commission has not established in any way how the guarantees granted by Article 21 of the TFEU are affected by State law, nor have they demonstrated any link between that provision and the legislation in question, it does not This remedy should not be examined in the light of Article 21 of the TFEU ", the Court has clearly chosen not to enter into such a complex issue as the interaction of personal taxes in the Member States with the freedom of movement of Union citizens European

On the other hand, the Court has declared that the principle of free movement of capital has been infringed due to the connection factors foreseen by Spanish legislation for the application of regional tax regimes, which are reserved only for taxpayers resident in Spain for purposes of fiscal or fiscal. Properties located in this country.

The Court considered that it was a discriminatory tax treatment, which was not justified by an overriding reason of public interest, or by an objective difference in the situation between residents and non-residents, or between property located within or outside the territory (13 ).

He affirmed: "When introducing differences in the tax treatment of donations and properties between the successors in law and the grantors resident in Spain and those who do not reside there, among those residing in Spain and those residing in Spain, who do not reside there. and between donations and similar provisions of real estate located in Spanish territory and abroad, the Kingdom of Spain has not fulfilled its obligations under Articles 63 TFEU and 40 of the Agreement on the European Economic Area of ​​May 2, 1992 "

Finally, it is worth noting the particular interest of this judgment in that the Court of Justice recognizes that discrimination can be characterized provided that the autonomous communities have the power to establish a favorable tax regime in their territory. regardless of whether they have exercised this faculty or not (14).

III - The consequences of the judgment of September 3, 2014 for the Spanish State.

The consequences of this ruling are relatively important: not only Spain has to adapt its tax legislation to European legislation (A), but also runs the risk of having to compensate the heirs and doers who have been harmed by this regime. discriminatory (b).

A - The adaptation of taxation in matters of inheritance and donations.

As indicated above, the Spanish State is obliged to modify its inheritance and donation tax system to eliminate situations of discrimination denounced by the Court of Justice and thus make it compatible with the TFEU and the Treaty. EEA Agreement

It is carried out with the approval of the law 26/2014 of November 27 (15) that modifies (16) the law of the tax on inheritances and donations by introducing regulations that allow identifying the applicable regional regime. to estates and gifts where the deceased or the donee resides in another State of the European Union or EEA for tax purposes, or where the donated property, whether mobile or immovable, is in one of those States or in Spain.

For the farms, the rules are the following:

  • If the deceased resided in a State of the European Union or the EEA other than Spain, the applicable regional regime is that of the Autonomous Community where the most valuable assets and inheritance rights are located. If there is no property or right in Spain, the regime of the autonomous community where it resides is applied to each taxpayer;
  • On the other hand, if the deceased resided in an autonomous community and the heirs reside in another state of the European Union or the EEA, then the current regime in that autonomous community is applicable.

In case of donation, the rules are different:

  • for real estate located in Spain with a resident resident in another Member State of the European Union or the EEA, the applicable regional scheme is that of the autonomous community where those properties are located;
  • if the real estate is located in a State of the European Union or the EEA other than Spain, it is the regime of the autonomous community where the State that is applicable resides;
  • where movable property is located in Spain and the donee resides in another State of the European Union or EEA, the applicable regime is that of the autonomous community where it was found that these assets had the greatest number of days during the five years prior to the donation;
  • In the case of the donation of several goods or rights to the same donee, which would lead to the application of more than one autonomous community regime, the tax payable will be calculated applying to the assets and rights located in the same autonomous community. a tax rate equal to the average rate, between the national system and that of each of the autonomous communities involved.

B - Compensation obligation

The judgment of the Court of Justice of the European Union allows the Spanish State to be liable for the damages caused to people by virtue of the application of this discriminatory tax system, since its entry into force on January 1. 2002

This is the case of heirs and doers resident in France who have received real estate and personal property located in Spain (17).

In accordance with the Franco-Spanish Convention of January 8, 1963 (18), these properties were subject to taxes in Spain regardless of the place of tax residence of the deceased (19).

In fact, in application of the rules promulgated by Law 29/1987 of December 18, 1987 (20), these properties were automatically subject to the general regime, with the aforementioned adverse consequences that this could entail in relation to the tax paid by the Spanish tax authorities.

The same happened in the case of a donation for a beneficiary whose tax residence is in France (21).

To the extent that there has been a violation of Community law and in accordance with the principles of "direct effect" and "primacy of Community law" and European jurisprudence (22), the Spanish State is, therefore, the obligation to reimburse the interested parties for the overpayment of the tax, including the default interest (23), that would have been charged on these inheritances and donations that could not benefit from the regional preferential regime due to this discrimination.

But this reimbursement refers only to the tax paid for inheritances and donations made as of January 1, 2002.

Finally, it is not automatic. It must be requested to the Spanish State using procedures that differ according to the time elapsed since the events.

This procedure begins with a refund request that must be submitted to the tax authorities.

When less than four years have elapsed since the end of the time allowed for the payment of the inheritance and donation tax (24), the reimbursement must be claimed through a procedure called "request for refund of undue payments" (25).

The tax administration will then have six months to respond (26) and its decision may be challenged before the Economic-Administrative Courts, the administrative courts specializing in fiscal and economic matters (27), and decisions of the latter can be appealed before the court administrative litigation (28).

On the other hand, if more than four years have elapsed, the claim for reimbursement must follow a procedure reserved for claims related to the patrimonial liability of the State provided for by Spanish law (29), which grants individuals the right to compensation. by the public authorities in relation to the damage suffered, except in cases of force majeure, due to the normal or abnormal functioning of public services.

For reasons of limitation, it is imperative that the claim be filed within the year following the publication of the judgment of the Court of Justice of the European Union.

If the tax administration does not decide within a certain time, usually six months, the application is considered rejected. Finally, the decision of the fiscal authorities, whether express or implicit, can be appealed before the administrative courts.


(1) These autonomous communities recognized by the Spanish Constitution of 1978 are seventeen, to which must be added two "autonomous cities": Ceuta and Melilla. They enjoy a state of autonomy with more or less extensive executive and legislative powers and have their own government and parliament.

(2) L. 21/2001, 27 dec. 2001, replaced by L. 22/2009, December 18. 2009, on the financing system of the autonomous communities of the common system and the cities with autonomous status.

(3) L. 35/2006, November 28, 2006, on income tax, and L. 19/1991, June 6, 1991, on property tax.

(4) L. 29/1987, December 18. 1987, on the tax on inheritances and donations.

(5) The Autonomous Communities of the Basque Country and Navarre enjoy a special status: L. 12/2002, of May 23, 2002, for the first, and L. 28/1990, of December 26. 1990, for the second, which grants them exclusive jurisdiction to impose patrimonies and donations with connectivity links with their territories.

(6) L. 21/2001, 27 dec. 2001, art. 24 and 40, replaced by L. 22/2009, 18 Dec. 2009, art. 32 and 48.

(7) Date of entry into force of the aforementioned Law 21/2001.

(8) L. 29/1987, December 18. 1987, art. two.

(9) For the same farm, tax savings in the autonomous communities of Extremadura, Valencia, the Balearic Islands, La Rioja, Cantabria, Catalonia and Madrid could range between 60% and more than 99%. . On the other hand, in the autonomous communities of Asturias, Galicia, Murcia, Andalusia and the Canary Islands, it was non-existent or purely symbolic.

(10) TFEU art. 21 and 63, and the EEA Agreement, art. 28 and 40

(11) CJEU, September 3, 2014, aff. C-127/12, Commission / Spain.

(12) Spain has already been convicted on several occasions for breach of European legislation, v. CJD, October 6, 2009, aff. C-562/07, European Commission v. Spain, and CJD, July 9, 2009, af. C-397/07, Commission / Spain.

(13) The Court of Justice relies on its jurisprudence on tax discrimination and, in particular, on its judgments 'Schumacker' (CJEC, 15 February 1995, Case C-279/93), on income tax matters . , "Mattner" (CJEU, April 22, 2012, case C-510/08), referring to donations, and "Welte" (CJEU, October 17, 2013, case C-181/12) and "Arens-Sikken (CJD, September 11, 2008, case C-43/07), on inheritance.

(14) CJEU, September 3, 2014, aff. C-127/12, expected 66.

(15) L. 26/2014, November 27, 2014, third final provision, modifying L. 35/2006, November 28, 2006, supra, the consolidated text of the Law on Income Tax for Non-Residents Approved by Royal Legislative Decree 5/2004 of March 5, 2004, and other fiscal regulations.

(16) The Government has taken advantage of this reform to also modify the Spanish wealth tax, equivalent to the Solidarity on Wealth Tax, whose jurisdiction is also shared or even transferred, in some cases to regional governments. and that it also discriminates against tax residents abroad, property owners located in Spain, by denying them the application of preferential regimes established by some regional governments for their tax residents. The objective is to apply to the residents of the other European Union and the EEA States the regime in the autonomous community where the most valuable Spanish assets and rights are found.

(17) This is also the case of those who, although residing for tax purposes in Spain, inherited a property belonging to a tax resident in another Member State of the European Union or the EEA, or who received a gift of real estate located in a European Union or an EEA State other than Spain.

(18) Conv. Franco-Spanish, January 8, 1963, in the field of inheritance taxes, DO 6 and January 7, 1964.

(19) Conv. Franco-Spanish January 8, 1963, art. 30, according to which real property is subject to inheritance tax only in the Contracting State in which it is located; Art. 33, which establishes that tangible personal property, including movable furniture, and articles and art collections are subject to the property tax of the place where they are on the date of death; Art. 34, according to which intangibles, which also include securities and all other claims, are subject to inheritance tax only in the state in which the deceased was a resident at the time of death.

(20) In accordance with Articles 2 and 7 of Law 29/1987, of December 18, 1987, heirs and entities not paid in Spain are subject to taxes for the acquisition of property and rights of any kind located, It may or may have been exercised in Spanish territory. It is the same for the collectors of sums coming from life insurance contracts signed with a Spanish insurance company or in Spain with a foreign company.

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