Can I Reclaim Any Capital Gains Tax I May Have Overpaid ?

If you were Non-Spanish resident who sold a property in Spain between January 1997 and December 2006, chances are that you paid 35% Capital Gains Tax.

This 35% was paid directly to the Hacienda after the sale of a property and applied to the surplus / profit that was declared at the time of sale - the Capital Gains Tax applied to Spanish Residents during this period was just 15%.

The EU since ruled that the disparity between these 2 taxation rates was essentially discrimination and forced the practise to come to an end – instead ensuring that there was just one rate of taxation, regardless of residential status, and that now stands at 15% for everybody.

Spanish law states that there is a legal right to reclaim any taxes that you have overpaid and a number of cases have been presented to the Hacienda with a successful outcome.

However, the ‘window’ to reclaim any overpaid taxes is due to close in November 2010, so the time to act is now !

So how do you go about making your claim ?

First of all you should check that you are eligible to claim, by meeting the criteria below :

• You sold a property in Spain between 1st Jan 1997 and 31st Dec 2006.

• You were NOT a Fiscal resident in Spain at the time of sale.

• The sale was completed as a Individual and NOT as a company.

…and once you are happy that you meet these conditions, check that you have the following documents in your possession – or get them in order as soon as you can :

• A completed Modelo 210, 211 or 212 Spanish Tax Form.

• A copy of both your Purchase AND Sale deed ( Escriura de Compraventa )

You should then contact a Spanish Lawyer who is experienced in Taxation issues – this is a complicated and specialist process.

You should be prepared for the process to take around 18 months, however a 6% annual interest can be added to the sum of your claim from the date that your application was formally submitted.