EU Citizens Who Are Not Residents in Spain Have Until November 21st to File For A Refund For Unduly Paid Taxes On Asset Transfers in Spain Prior to 2007

20 September 2010

A ruling dated January 2010 from the European Court of Justice opened the door to claims in cases where the statute of limitations had expired through a special State liability proceeding. The claim must be filed before the deadline of November 21, 2010.

On November 21, 2009 the Official Journal of the European Communities (OJEC) published the ruling of the European Court of Justice (ECJ) on C-562 which determined that Spain had breached its obligations under article 56 of the EU Treaty and article 40 of the Agreement on the European Economic Area (which includes Norway, Iceland and Lichtenstein). Until December 31, 2006, it treated capital gains obtained in Spain (e.g., from property sales) differently, based on whether the taxpayers were residents or non-residents in Spain.

Specifically, resident individuals paid a 15% tax rate (as long as the date of purchase and transfer both fell within a one-year period) while non-resident individuals paid a 35% tax rate.

In general, the statute of limitations for tax debts in Spain is four years, which would lead one to believe, given the date of the ruling, that the statute of limitations had already expired in the majority of the cases and, therefore, it was no longer possible to claim for a refund of unduly paid taxes.

However, on January 26, 2010, the European Court of Justice handed down another ruling (C-118/08) which opened the door to time-barred cases through a State liability proceeding which, in turn, must meet the criteria established in Spanish Supreme Court case law.

The proceeding, which essentially does not require the exhaustion of all viable appeals has, nonetheless, a time limit: specifically, within one year from the date of publication of ruling which declared it contrary to EU rules.

For this reason, and with regard to the time-barred taxes for the transfer of assets in Spain by individuals residing in the EU or the European Economic Area, the period to claim for wrongly paid taxes comes to an close on November 21, 2010 and therefore paperwork required to file the corresponding claims must be prepared with the utmost urgency.

To that end we urge you to contact our experts in the area, Nils Döhler ( and José Blasi (, at your earliest convenience.