First tax court decisions extending wealth tax shield to non-resident taxpayers

2026-01-14T18:17:00
Spain
The Spanish administrative tax court confirms recent Supreme Court case law and applies wealth tax cap also to the Solidarity Tax on Large Fortunes
First tax court decisions extending wealth tax shield to non-resident taxpayers
January 14, 2026

As explained in our earlier Post | Wealth tax shield extended to non-resident taxpayers, Spain’s Supreme Court ruled in two judgments late last year that also non-resident taxpayers can apply the maximum taxation cap when calculating their Spanish Wealth Tax liability following the EU free movement of capital principle. This was a significant shift, as according to the wording of the law this benefit is limited to Spanish tax residents who are taxed in Spain on their worldwide wealth.

The Supreme Court’s interpretation not only allowed non-resident taxpayers to apply the wealth tax cap but also suggested that the same approach should extend to the Temporary Solidarity Tax on Large Fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas). This tax was enacted as sort of a substitute wealth tax for those regions that decided not to levy wealth tax.

The Central Economic-Administrative Court (Tribunal Económico-Administrativo Central) has now issued two resolutions dated 18 December 2025 confirming this approach: non-resident taxpayers taxed only for their Spanish situs wealth may apply the cap also in the Temporary Solidarity Tax on Large Fortunes. These tax court resolutions are the first administrative resolutions applying the Supreme Court rulings to Wealth Tax and extending it to the Temporary Solidarity Tax on Large Fortunes.

One key point remains open: the Supreme Court did not set out detailed guidelines on the mechanics of how to apply the tax shield in non-resident cases, and these administrative resolutions provide little additional guidance. The tax court upholds the taxpayers’ arguments but defers to the enforcement phase the specifics of how to apply the cap. This means that the taxpayer will need to provide the relevant documentation, and the Spanish tax agency will perform the necessary calculations to determine the cap’s application.

Further guidance is expected in future rulings, which hopefully will clarify how to apply this cap for non-residents under both taxes.

For more information, please contact our Knowledge and Innovation Area specialists.

January 14, 2026

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