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The European Commission has referred Spain to the EU Court of Justice for their stance on inheritance and gift tax. Current rulings have been branded as being discrimantory in that non-residents are required to pay a higher rate of tax than residents are.
The Commission had previously instructed Spain to comply with EU rules in this regard, sending letters in May 2010 and Februaru 2011 to formally request that they brought their Inheritance and Gift tax rulings inline with the rest of the EU, which they have failed to comply with.
Inheritance and gift tax in Spain are applied by both the national and regional governments.
Regional legislation allows residents a number of tax benefits that allow them to pay much lower taxes than non-residents. The Commission considers that this action is 'discriminatory' and that it constitutes an 'obstacle to the free movement of people and capital', and as such Spain is in breach of the Treaty on the Functioning of the European Union.
Find out how to protect your Spanish assets from Inheritance taxes by clicking the link here .