Donations and Successions
The inheritance and donations tax is levied on acquisitions by natural persons, free of charge, as a result of any legal business carried out between living people. As well as donations, this tax also applies to the following:
- The writing off of debts in the spirit of generosity.
- The renunciation of rights in favour of a specific person.
- The assumption of debts which frees the previous debtor of their debt obligations.
- The withdrawal from legal or arbitration proceedings in favour of the other party, in the spirit of generosity.
- Financial benefits derived from life insurance when the beneficiary is not the contract holder.
When such an acquisition is made by a legal person (such as a company or foundation), it will be taxed through corporation tax.
The party responsible for paying this tax is the party receiving the donation or benefitting from the transaction.