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More information about the Legal Basis of the Tax Reclaim

• On October 6th the European Court of Justice ruled that Spain violated the European laws by charging a higher rate of capital gains tax to non-residents, this being 35% as opposed to 15% for Spanish nationals.
• According to the case law set up by the ECJ, European citizens who have been charged a tax which turned out to be illegal are entitled to get the refund of said tax. The problem arises regarding the procedure to get said refund. EC Law does not have any specific rule to get back the tax. The ECJ has held many times that the procedure to get the refund is governed by the domestic rules of the Member State concerned (Spain in this case).
• The Spanish legal procedures that rule this refund are complex and may be different for each client situation. It is not going to be just a matter of presenting reclaims in front of the Spanish Tax Office expecting a direct positive decision. The Spanish Council of Ministers, the Spanish Supreme Court and the ECJ are involved.
• People affected really need to understand it is worthwhile to use expert advisors who are familiarized with this new and unusual legal situation and with the specific Spanish legal procedures.
• In 2007, COSTA | ALVAREZ | MANGLANO the International Tax experts, initiated and are currently leading a successful ‘No win – No Fee’ legal action on behalf of over 600 clients, reclaiming from the Spanish Government their overpaid Capital Gains Tax.
• Mr. Emilio Alvarez, Managing Partner of Costa, Alvarez, Manglano, states the following:
• The consequences of the ECJ ruling will have a great impact, not only for those citizens that paid the full 35%, but also for those that only paid the 5% compulsory withholding tax on the selling price.
• Up until now, we have only been able to file reclaims and get refunds for those that paid the full 35% tax charged on their capital gains and only for those who sold their properties in 2004, 2005 and 2006. For these clients, the legal battle has been fully successful.
• This ECJ ruling has now opened the doors for possible refunds to any UK / EU citizen who sold a property in Spain between January 1997 and December 2006, whether they paid the full 35% CGT or only the 5% withholding tax. For them, we need to begin a different and complex legal battle, however we are confident of succeeding once again.
• We are frequently contacted by people who received wrong advice regarding this claim and have now ruined their chances to get their money back. Most of them because of mistakes in the legal procedures. For most of them, there is nothing we can do now. This is why many lawyers and tax advisors have decided to cooperate with us in this specific reclaim.
• The average reclaim for those that paid the full 35% tax is 15,000 € and for those who only paid the 5% withholding tax the average amount is 8,000 Euros.