Saturday, 26th May 2018
FINANCE & INVESTMENT Article
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This Month's Magazine
Overpayments of CGT by non resident property vendors.

Overpayments of CGT by non resident property vendors.

Between 2003 and the end of 2006, UK citizens and other non resident EU citizens paid 35% Capital Gains Tax (CGT) when selling their property, whilst Spanish nationals only paid 15%.

The European Commission has said that this overpayment contravenes European Community Treaty discrimination rules and should not have been charged by the Spanish Tax Authorities. It considers that the “difference in the tax treatment of the two categories of taxpayers, in so far as it results in a higher tax burden on non-resident individuals in situations objectively similar to those of residents, constitutes indirect discrimination on the grounds of nationality prohibited by the Treaty
Therefore, if you meet the requirements below, you are entitled to reclaim this overpayment, plus approx. 6 % interest annually from the time the CGT was originally paid (estimated average to reclaim: 20 - 30.000 €).

To make a claim, you must meet the following criteria:

  1. You sold a Spanish property between 1/08/04 and 31/12/2006.
    The law states that claims must be made within four years of a property being sold.
  2. You were not a fiscal resident in Spain when you sold your property.
    By law you must not have been resident in Spain at the time of selling your property. 
  3. You paid the Capital Gains Tax owed on the property sale to the Spanish authorities.
    If the amount declared when you sold the property was higher than the amount you paid when you bought the property and you paid the Capital Gains Tax, you are entitled to reclaim. 
  4. You sold your Spanish property as an individual and not as a company.
    You can only claim if the legal owner selling the property was an individual. 
  5. You have, or are able to obtain a copy of the Spanish Tax Form “Modelo 212.”
    It is compulsory to present a copy of the Spanish Tax Form “Modelo 212” (form headed in Spanish: “Agencia Tributaria. Impuesto sobre la Renta de no Residentes Modelo 212”) in order to proceed with the reclaim.

If you happen to think you are entitled to a refund, then you should contact a “Gestoria” or a “Spanish Lawyer” without delay.


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Direct effect of the following laws:-

  • Articles 12, 18, 39, 43 and 56 of the EC Treaty as worded in the Maastricht Agreement of 7th February,1992
  • Directive 88 / 361 / CEE on the freedom of movement of capital.

The direct effect of all the above have been expressly acknowledged by the European Court of Justice.

Case Law of the European Court of Justice in the Gerritse and Aschler cases.

Infringement procedure of the European Commission against Spain for the tax treatment of CGT for non-residents: Spain changed its legislation as of January 1st, 2007.



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