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V3540-20 11 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renta mundial

Taxation in Spain on the disposal of real estate located in Germany

A tax resident in Spain has requested information regarding the taxation of the sale of a property owned in Germany. The Directorate General for Taxes (DGT) has ruled that, as a Spanish tax resident, the individual is subject to tax on their worldwide income, and that the sale may be taxed in both Germany and Spain.

The question raised

Question posed: Taxation in Spain of the potential income derived from the disposal of the aforementioned real estate.

The DGT's ruling

The resident in Spain is taxed on their worldwide income pursuant to the Personal Income Tax Act (LIRPF). According to the Convention with Germany, the power to tax the disposal of real estate is shared between both States. If Germany taxes the income, Spain must eliminate double taxation through a deduction of the tax paid in said country. The gain or loss shall be calculated as the difference between the acquisition and transfer values in accordance with Spanish regulations.

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