On July 28, Spain’s National Court recognized the right of non-EU taxpayers to apply deductions in the Non-Resident Income Tax (IRNR) for rental properties, aligning their treatment with that of EU residents.
Until now, non-EU residents were unable to deduct expenses (maintenance, local taxes, etc.), creating a clear disadvantage compared to EU citizens and discouraging foreign investment in Spain.
In a landmark decision, the court ruled that this exclusion violated both the principle of free movement of capital under the TFEU and the non-discrimination clause of the agreement with the U.S.
🔎 While this ruling is not yet binding case law — pending confirmation by the Supreme Court — it sets an important precedent toward fairer taxation and opens the door for non-EU taxpayers to rectify past tax returns.
This is a significant step towards a Spanish tax framework that is more equitable and aligned with the principles of a competitive, international market.
Until now, non-EU residents were unable to deduct expenses (maintenance, local taxes, etc.), creating a clear disadvantage compared to EU citizens and discouraging foreign investment in Spain.
In a landmark decision, the court ruled that this exclusion violated both the principle of free movement of capital under the TFEU and the non-discrimination clause of the agreement with the U.S.
🔎 While this ruling is not yet binding case law — pending confirmation by the Supreme Court — it sets an important precedent toward fairer taxation and opens the door for non-EU taxpayers to rectify past tax returns.
This is a significant step towards a Spanish tax framework that is more equitable and aligned with the principles of a competitive, international market.