Press Release: Direct taxes: The European Commission requests Spain to end discriminatory taxation of non-resident taxpayers

The European Commission formally requested that Spain change its tax provisions according to which non-residents are taxed on the gross amount of their income, whereas residents are only taxed on their net income. The Commission considered that these rules are incompatible with the EC Treaty, which guarantees the free movement of persons and workers, the freedom to provide of services and the free movement of capital. The request took the form of a reasoned opinion (second step of the infringement procedure provided for in Article 226 of the EC Treaty). If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the Court of Justice of the European Communities.