On 29/10/2025, an important ruling of the Spanish Supreme Court was published, in which it was decided that denying the joint limit on Personal Income Tax (IRPF) and Wealth Tax (IP) to individuals who are not tax residents in Spain is discriminatory.
The background to this ruling was the filing of a Wealth Tax self-assessment (Form 714) by a Belgian tax resident who was taxed under a limited tax liability regime (obligacion real) on his properties located in the Balearic Islands. This taxpayer, a non-tax resident in Spain, was not allowed to apply the mechanism related to the joint IRPF–IP limit, established in Article 31 of Law 19/1991, of the 6th June, on the Wealth Tax.
Subsequently, the taxpayer submitted a request to amend the self-assessment filed on Form 714. He sought a refund on the grounds that since he was required to be taxed under a limited tax liability regime (obligacion real) solely because the taxable properties were located in Spain, while his tax residence was in Belgium where he was taxed under the impôt des personnes physiques et taxes additionnelles (IPPTA), a discriminatory situation was arising. In addition, it was claimed that the principle of free movement of capital established in the EU Treaties was being infringed. Consequently, he requested the application of the aforementioned limit.
That is to say, the taxpayer argued that the total tax payable under the Wealth Tax together with the amount paid under the Belgian Personal Income Tax (IPPTA) could not exceed 60% of the sum of the taxable bases of the latter. Furthermore, it could not exceed 80% of the gross Wealth Tax liability.
After a true legal ordeal, in which the Balearic Islands High Court had already recognised the Belgian taxpayer’s right to apply the limit set out in Article 31 of the Wealth Tax Law while being taxed in Belgium under the IPPTA, the case ultimately reached the Supreme Court.
In this instance, Spain’s Supreme Court established the correct interpretation of the aforementioned article in its fourth legal finding, stating:
“Habitual residence, whether in Spain or abroad, does not justify different treatment given to residents and non-residents, in this case consisting of denying the latter the limit on the tax liability provided for in Article 31.1 of the Wealth Tax Law. This difference in treatment is discriminatory and unjustified.”
Therefore, this ruling opens the door to reviewing and potentially requesting the corresponding refunds of Wealth Tax in cases where non-tax residents in Spain did not apply the aforementioned mechanism.
At PLANA VENTURA GARCÉS we offer comprehensive and specialized advice on non-resident taxation, providing clear and effective solutions for any queries or procedures regarding your tax obligations in Spain. If you are interested in initiating a claim for possible refunds of overpaid Wealth Tax, please do not hesitate to contact us.
