On 12 March 2025, the European Commission announced that Brussels is taking Spain to court for discriminatory tax treatment of non-residents. This case highlights a problem that directly affects those who obtain capital gains in Spanish territory without residing in the country.

Investing in Spain has always been attractive thanks to its quality of life and economic opportunities. However, the European Commission has detected significant discriminatory tax treatment against non-resident taxpayers in Spain, especially with regard to capital gains.

What is the problem for which Brussels is taking Spain to court for discriminatory tax treatment of non-residents?

The controversy lies in Spain’s tax treatment of capital gains derived from the transfer of assets. Under Spanish law, when the payment of a transfer is deferred (i.e. over one year), resident taxpayers have the option to pay the tax in instalments depending on the cash flow or to defer payment until the moment when the capital gains accrue. However, this option is not available to non-residents, who must pay tax immediately, regardless of the terms of payment.

For example, a problem arises when you sell an asset and agree to receive payments in instalments of more than one year. Spanish law allows residents to pay capital gains tax proportionally to the cash flow received, giving them significant financial flexibility. Unfortunately, this option does not exist for non-resident taxpayers, who must be taxed immediately in full, regardless of when they actually receive the payments.

This discriminatory tax treatment of non-residents, denounced by Brussels, clearly violates the rights of non-resident taxpayers and could seriously affect your liquidity and profitability as an investor. Although Spain has repeatedly defended its tax legislation against European warnings since 2021 and again in 2024, the Commission considers that the efforts made have been insufficient and has therefore decided to take the matter to the Court of Justice of the European Union.

Investing in Spain requires knowing the specific tax implications for non-residents: be prepared and protect your interests. At Pérez Parras Economistas y Abogados we are experts in international taxation for non-residents and residents, sales and purchases, foreigners and other areas of law. We have offices in Malaga and Nerja, and are bilingual Spanish-English.

What does this mean for non-residents?

This allegedly discriminatory tax treatment of non-residents can place a significant financial burden on you, if you are a non-resident in Spain and earn capital gains in Spain. By not being able to benefit from the same facilities as residents, you are forced to assume a higher tax impact immediately, which could discourage foreign investment in the country.

In other words, as a non-resident investor, this situation could have a direct impact on your economic decisions, creating disadvantages compared to residents who do enjoy more favourable conditions. It is therefore essential to keep an eye on how this court case evolves in Europe.

In addition, this case highlights the importance of having specialised tax advice, especially for those who are not resident in Spain but have financial interests in the country. Tax regulations can be complex and sometimes generate situations of inequality that need to be known and, if necessary, appealed.

Conclusion

The European Commission’s decision to bring this case before the Court of Justice of the European Union could mark a turning point in the tax treatment of non-residents in Spain. If the Court rules in favour of Brussels, Spain could be forced to amend its legislation to ensure equal treatment of capital gains.

If you want to buy a property, business premises, building or parking, or sell a property in Malaga, and you want to avoid problems following the purchase of a property in Malaga, in the Law Firm Pérez Parras Economists and Lawyers in Málaga we are expert lawyers in the purchase and sale of properties in Malaga and Nerja, with a team of lawyers and economists bilingual English / Spanish who can advise you to avoid surprises in the purchase of your property. We have offices in the centre of Malaga and Nerja. Do not hesitate to contact us and ask us for a quote to accompany you in the process of buying or selling your property. We will prepare and review your earnest money contract after ensuring that the purchase you wish to make is viable and secure, without hidden charges of any kind, and we will help you and deal with all the taxes associated with your property purchase and sale operation in Málaga, optimising for example the IRPF to pay if the property comes from an inheritance, advising you until the end of your purchase, or sale of the property, including the tax declaration, whether you are resident or taxed as a non-resident, and any other procedure with the Administration or Land Registry. Equally, if you have any difficulties following the sale or purchase of a property, please do not hesitate to contact us so that we can advise you and defend you in or out of court if necessary. If you are a highly qualified professional in Malaga and wish to purchase your property in Malaga, we will also advise you in every step of the purchase process, ensuring that the property you wish to buy and the investment you wish to make will not cause you any problems, protecting your interests, organising your taxes and taxation as a highly qualified professional, so that you can develop your professional career and settle your life and your future in Malaga or Nerja with all the guarantees of the best legal advice.