The application of regional regulations on Inheritance and Gift Tax by a non-resident taxpayer is a right and not an option. Every tax option must describe a regulatory alternative, consisting of choosing between different and exclusive tax legal regimes.

In cases where a natural person not resident in Spain receives an inheritance or a gift, they must self-assess the Inheritance and Gift Tax at the AEAT and not in the corresponding Autonomous Community. Natural persons resident in Spain must also self-assess the AEAT when the deceased was a non-resident, or when a property located abroad is received as a gift. This means that the tax is paid by the State.

Within the AEAT, the management of this tax is entrusted to the National Tax Management Office, without prejudice to the fact that the taxpayer can access the regulations that each Autonomous Community has regulated, which are much more beneficial than the state regulations when there is a family relationship.

However, the TEAC established in its resolution of February 28, 2023, R.G. 1204/2020, that the application of the regional regulations on the Inheritance and Gift Tax (ISD) by a non-resident taxpayer is an option and not a right.

In its final argument, it reasoned that when the legislator adapted the internal legislation to the principle of non-discrimination enshrined in the jurisprudence of the European Court, it could have modified the rules contained in article 32 of Law 22/2009 (System of financing of the Autonomous Communities) – article 24 of the previous Law 21/2001 -, whose rules of application of the state regulations to non-resident taxpayers or to residents with non-resident taxpayers, were those that caused the discriminatory treatment. Instead, the Spanish legislator maintained the same general rules for the application of state regulations, although granting in the Second Additional Provision of Law 29/1987 (ISD Law) the right to apply regional regulations.

The TEAC concludes in that resolution that when in our tax law, whenever the legislator grants the taxpayer the possibility of choosing two different regulations for the same taxable event, we are faced with the case of the option referred to in art. 119.3 of Law 58/2003 (LGT) which establishes that: “The options that according to tax regulations must be exercised, requested or renounced with the presentation of a declaration cannot be rectified after that moment, unless the rectification is presented in the regulatory declaration period.” Therefore, outside the voluntary period it is no longer possible to opt for a different regulation.

Well, the National Court, in its judgment of June 21, 2024, Rec. No. 796/2023, has established otherwise, that is, a non-resident who applied the state regulations of the Inheritance and Donations Tax can modify the autoliquidation to apply the regional regulations because it is not before a tax option.

The conclusion of the National Court is that the taxpayer could request the rectification of his ISD self-assessment in which he applied the state regulations to modify it by applying the regional regulations, because applying one or another regulation does not constitute an option but a right of the taxpayer, In this case, the appellant’s preference for Catalan regulations over state regulations.

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