WRITTEN QUESTION E-3656/00 by Klaus-Heiner Lehne (PPE-DE) to the Commission. Difference in treatment under Spanish tax law.
Date: 2000-11-27
Institutions: European Parliament, Provisional data
Subjects: Spain, application of EU law, double taxation, property tax, tax harmonisation

19.6.2001

EN

Official Journal of the European Communities

C 174 E/103

communications across the Kvarken and also between Sweden and Norway. The proposal is expected to be
approved in the coming weeks, which would allow projects to be submitted to the programme early next
year.

(1) Communication from the Commission to the Council concerning the employment aspects of the decision to abolish

tax- and duty-free sales for intra-Community travellers, OJ C 66, 9.3.1999.

(2) Commission staff working paper clarifying Community instruments available to Member States to address possible

consequences of the abolition of intra-Community duty-free sales on 1 July 1999 (SEK(1998) 1994).

(3) Commission notice concerning the VAT and excise rules to be applied from 1 July 1999 by suppliers of goods on
board ferries and aircraft or in airports to passengers travelling within the European Union, OJ C 99, 10.4.1999).

(2001/C 174 E/106)

WRITTEN QUESTION E-3656/00

by Klaus-Heiner Lehne (PPE-DE) to the Commission

(27 November 2000)

Subject: Difference in treatment under Spanish tax law

With regard to the taxation of real property owners, Spanish tax law makes a distinction between Spanish
citizens and persons who do not have Spanish nationality. This means that EU citizens who are not
resident in Spain but possess real property there have to pay income tax as well as wealth tax to the State.
Persons (cid:145)no residentes en Espaæa(cid:146) (non-resident in Spain) have to pay income tax once a year at the rate of
2 % above the cadastral value. The wealth tax for persons (cid:145)no residentes en Espaæa(cid:146) is also payable once a
year, the basis of assessment for this tax being the value of the property at the date of purchase.

In addition, when real property is sold in Spain a distinction is made between residents and non-residents
for the purposes of profits tax. Vendors of real property who are not resident in Spain are taxed at a
standard rate of 35 % on their capital gain whilst the rate of tax for vendors resident in Spain is only 20 %.

This gives rise to the following questions:

1.

Is the difference between the treatment of EU citizens who own real property in Spain but are not
resident there and real property owners who are resident in Spain compatible with the prohibition on
discrimination on the ground of nationality, which is an established fundamental freedom?

2. What measures does the Commission intend to take if this difference in treatment is incompatible
with the prohibition on discrimination, not justified on objective grounds and does not comply with
the principle of proportionality?

Answer given by Mr Bolkestein on behalf of the Commission

(24 January 2001)

The Commission would inform the Honourable Member that the tax arrangements applicable to European
citizens owning property in Spain but not resident there were examined in Written Question E-1380/99
by Mr Swoboda (1), and would refer him to the answer to this Question.

As a general rule, Spanish legislation levies income tax and wealth tax on non-rented property which is
not a main residence; profits on a sale form part of the income of the year of sale. The chargeable events
and taxable amounts are identical for residents and non-residents; however, there are differences in the
rates applied and personal allowances.

The annual notional income from this type of building amounts to 2 % of its rateable value (Law No 40/
1998 on individual income tax, Article 71(1), BOE 10.12.1998, and Law No 41/1998 on non-residents(cid:146)
income, Article 23(5), BOE 10.12.1998). For residents such income is added to their worldwide income
which is taxed on a sliding scale up to a marginal rate of 48 % (39,6 % for the State and 8,4 % for the

C 174 E/104

Official Journal of the European Communities

EN

19.6.2001

autonomous regions (Law No 40/1998, Articles 50 and 61); up to the 1998 tax year the rate could be as
high as 56 %). However, for non-residents, a general flat-rate amount of income tax (25 %) applies (Law No
41/1998, Article 24(1)(a)). In the Commission(cid:146)s view non-residents are only put at a disadvantage if their
worldwide income, hypothetically subject to Spanish tax in the same way as that of residents, does not
attain a marginal rate of 25 % (for 2000 such a rate applies for a taxable income of PTE 2 142 000
(€ 10 684). In such an unlikely event, the Commission would consider that the Spanish authorities should
only apply the amount of tax that would be payable by residents.

The profits (defined in Law No 40/1998, Articles 31 and 32) earned by non-residents on the sale of
property in Spain which is not a main residence are taxable in Spain (Law No 41/1998, Article 12(1)(g)) at
a standard rate of 35 % (Law No 41/1998, Article 24(1)(f)). However, a rate of 18 % applies to profits
earned by residents who were owners for more than one year (Royal Decree 3/2000); if the building is
sold during the first year, profits are taxed according to the sliding scale referred to above. In such a case
the conditions mentioned above would have to apply (in 2000, a marginal rate of 35 % is attained at a
taxable income of PTE 4 182 000 (€ 20 859) for the Commission to conclude that non-residents were being
treated less favourably. However, it does consider that there is clear discrimination as a different flat rate is
applied. It has brought this to the attention of the Spanish authorities and reserves the right to initiate
formal proceedings under Article 226 of the EC Treaty if legislation is not brought into line with the
requirements of the Treaty.

The sliding scale for property tax applies equally to buildings owned by residents and non-residents.
However, residents receive a basic allowance of PTE 18 000 000 (€ 89 783). This would only discriminate
against non-residents if their assets outside Spain were worth less than that amount.

(1) OJ C 27 E, 29.1.2000.

(2001/C 174 E/107)

WRITTEN QUESTION E-3661/00

by Glenys Kinnock (PSE) to the Commission

(27 November 2000)

Subject: Coastal fishing in ACP countries

Would the Commission outline what measures it is taking to ensure that Community fishing vessels,
operating under EU-ACP fishing agreements, respect the needs and rights of small-scale, coastal fishing
communities in ACP countries and do not damage the local ACP fisheries sector?

What action is the Commission taking to improve the capacity of ACP countries to patrol the waters
under their jurisdiction, so as to control the activities of both Community and ACP fishing fleets and
thereby prevent overfishing?

Answer given by Mr Fischler on behalf of the Commission

(5 January 2001)

The Commission thanks the Honourable Member for her question and informs her that, in order to avoid
clashes with small-scale traditional fishermen, protocols to fisheries agreements specify fishing zones for
the Community which differ from those for local vessels.