Spain keeps discriminatory treatment on personal income tax

income tax
Income tax

New TEAC Ruling disregards applying European Non-Residents same discounts than Residents are granted.

Even despite UE Commission Letter asking Spain to dismantle all kind of discriminatory practices.

A recent ruling (24/11/2020) from Central Administration Court (TEAC) disregarded a claim from a German non-resident to be refunded.

On a first stage, the taxpayer declared and paid taxes for his Spanish based revenues through IRNR (Impuesto sobre la renta de no residentes / Tax on non-residents revenues). After that, he asked to be refunded on the basis that he must be granted 60% reduction on real estate rental revenues that Spanish residents are allowed.

The term Spanish residents to these effects means the whole of Spanish nationals and foreign residents paying their worldwide revenues in Spain. So a German national living in Spain would get the same reduction on rental revenues than a spanish national would do.

The Court acknowledged the Letter from UE-Commission asking for dismantling this kind of praxis, but it states that as far as Spanish Law has not changed and the UE has not up to date started an Infringement Procedure, things will remain the same.

So, the demand was disclosed.

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