The ruling of the European Court of Justice of 3th September 2014 declared that the Spanish legislation regarding inheritance and gift taxes was contrary to the fundamental principles of the EU of liberty of establishment and liberty of movement as it allowed different treatment according to where the deceased or the beneficiary were residents, in Spain or abroad.
That court ruling provoked a change in the Spanish legislation ( Disposición Adicional Segunda Ley del Impuesto).
The amendment allows taxpayers to opt to apply to their tax duties the legislation of the Comunidad Autónoma where the most valuable assets are located if it is beneficial for them if either the deceased or the beneficiary were residents in an EU or an EEA country.
Recent Court rulings from the Spanish Supreme Court (22-3-2018 and 19-2-2018) established that the different treatment of the people involved was contrary to the fundamental EU principles either if they are residents in a Member State or in a third country and also ruled any tax paid over the amount owed under the legislation of the corresponding Comunidad Autónoma to be reimbursed.
That is undoubtedly good news but as this ruling has not resulted in any change to the legislation so far, we must deal with this carefully either in the liquidation of new taxes or in claiming reimbursement of taxes already paid.
Perhaps when liquidating new taxes, as the current law obliges payment, the best solution is to pay in full and then immediately claim the reimbursement.
When claiming reimbursement of the taxes already paid it is advisable, if possible, to look for the shortest time limit to claim. In the cases stated above the claim was on the grounds of responsibility of the State for unfair treatment which has a time limit of one year.