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  • Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 4/25/2013

Spain - Real estate tax referred to CJEU as resident-favorable 

April 25: The European Commission (EC) today announcing that it has referred to the Court of Justice of the European Union (CJEU) the real estate tax provisions in Spanish law that provide tax benefits for individual residents who reinvest capital gains from the sale of a home, but prevent non-residents from enjoying the same tax benefits.

According to today’s EC release—IP/13/365 (25 April 2013)—Spanish law provides that capital gains from the sale of an individual’s “permanent residence” are exempt for tax if the money received from the sale is used to buy another permanent residence. However, this provision only applies for Spanish residents and, therefore, is viewed by the EC as discriminating against non-residents (who could pay more in taxes on the sale of a residence).


The EC considers that Spain's current law is discriminatory, is an obstacle to the free movement of persons, and breaches EU law.


In September 2012, the EC issued a "reasoned opinion" formally requesting that Spain comply with EU rules (the reasoned opinion was the second step in the infringement procedure). Today’s referral to the CJEU is the final step in the infringement procedure.




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