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V2900-19 21 October 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · obligación personal

Must declare foreign inheritance and claim double taxation deduction

A Spanish resident asks whether they must declare an inheritance already taxed in Italy. The DGT responds that, as a resident, they are subject to personal tax liability and can claim the foreign tax paid.

The question raised

Question posed: Whether the assets and rights received in inheritance must be declared for Inheritance and Gift Tax in the Kingdom of Spain, having paid the inheritance tax in the Italian Republic.

The DGT's ruling

The resident in Spain is subject to the Inheritance and Gift Tax by personal obligation on the totality of the assets and rights received, including life insurance and foreign bonds. As the Double Taxation Convention with Italy does not apply to the Inheritance and Gift Tax, the taxpayer must utilize the international double taxation deduction provided for in the LISD. This deduction allows for the subtraction of the lesser of the amounts resulting from the amount paid abroad or the result of applying the average effective rate of said tax to the external increase in wealth.

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