(November 26, 2014)

On November 26, 2014 the European Commission issued a press release announcing that it decided to refer Spain to the Court of Justice of the European Union to ensure that the Spanish legislation, the Inheritance and Gift Tax legislation of the Territorio Histórico de Bizkaia, complies with EU law.

According to the European Commission under the provisions of the Inheritance and Gift Tax legislation of the Territorios Históricos de Alava y Bizkaia, public debt issued by the local administrations (la Comunidad Autónoma del País Vasco, the Diputaciones Forales or the Entidades Locales Territoriales de los tres Territorios Históricos) benefits from a preferential inheritance tax treatment compared to that applied to other similar titles issued in other EU/EEA States. The European Commission is of the opinion that this difference in tax treatment discriminates against investments in public debt issued by other EU Member States or EEA States.

On February 21, 2013, the European  Commission sent a request taking the form of a reasoned opinion to Spain. Spain was requested to amend the provisions of the Inheritance and Gift Tax legislation of the Territorios Históricos de Alava y Bizkaia, for failure to comply with the principle of free movement of capital. According to the European Commission only the Territorio Histórico de Alava has amended its legislation. Therefore the case is now being referred to the Court of Justice of the European Union in respect of the Territorio Histórico de Bizkaia.

For further information click here to be forwarded to the press release as issued by the European Commission in this respect.

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