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V2536-23 21 September 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · pacto de mejora

Improvement agreements under Galician Civil Law may be subject to inheritance tax

An official stationed abroad inquires about the applicable regulations and administration regarding an improvement agreement. The DGT indicates that if the agreement is testamentary in nature, it is subject to tax via personal obligation and Galician regulations may apply, but it must be settled with the Central Administration.

The question raised

Regarding the competent administration from a territorial perspective, where the Inheritance and Gift Tax return must be filed, and the applicable legislation.

The DGT's ruling

If the transaction falls within the succession agreements of Law 2/2006, it is a mortis causa transfer with accrual on the date the agreement is celebrated. If it is not a succession agreement, it is taxed as an inter vivos donation. The taxpayer is subject to taxation by personal obligation and may apply the regulations of Galicia, but as they are not a resident, the competent administration is the State Tax Administration Agency.

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