Non residents paying wealth tax in Spain can claim their money back

If you paid Wealth Tax in Spain as Non Resident in the last 4 years there may be an opportunity to get a refund from the Spanish Tax Authorities.

Last February, our Partner and Head of Tax, Inmaculada Domecq, published a very interesting article at Legal Today about the Wealth Tax payable by non-residents in Spain[1]. In her opinion there are grounds enough as to consider the Wealth Tax to be discriminatory for Non Residents in accordance with the EU legislation. This discrimination would be based on the fact that Spanish residents are entitled to apply a limitation (and reduce the tax payable by an 80%) if the Wealth tax exceeds the 60% of the Income Tax basis whereas Non residents are not entitled to apply this limitation.

This different treatment results in Non Residents paying more Wealth Tax than Residents of Spain, just because the latter pay their Personal Income Taxes to the Spanish Government whereas the formers pay their Personal Income Taxes to a third State (whether EU member or not).

Now, the Supreme Court of Justice of Balearic Islands has published a recent Judgement confirming Inmaculada’s views and ordering the Spanish Tax Authorities to refund the Wealth Tax paid in excess by a Belgium resident after accepting the right of the latter to apply the limitation rule, taking into consideration the Personal Income Tax paid by him in Belgium.

This Judgement opens the door to claim Wealth Tax paid in excess in the last 4 years as well as provides a solid argument to start applying this limitation to Non Residents paying Wealth Tax in Spain.

Our Tax Team will be happy to review your particular case and see if there are chances available to get a refund from the Tax Authorities.

Reach out to UHY Fay and Co.

Inmaculada Domecq

Partner

idp@uhy-fay.com