Constitutional Court hears conflict between government, Senate on inheritance tax repeal

The Constitutional Court of Spain has begun hearings on a conflict between two constitutional bodies initiated by the government of Pedro Sánchez against the Senate. The disagreement stems from an agreement made by the Senate on November 21, 2023, which considered a bill repealing the Inheritance and Donation Tax for processing, contrary to the wishes of the government.

Legal experts indicate that María Luisa Balaguer, a professor of Constitutional Law and member of the majority sector at the Court, has been involved in discussions regarding this matter. According to Article 134.6 of the Constitution, any proposals or amendments involving changes to budgetary policies require government consent for processing.

In December 2023, the Popular Party proposed eliminating the Inheritance and Donation Tax in all communities across Spain. While many regions already have significant discounts on this tax, some still impose it. If fully eliminated, it would require significant compensation from central government funds to compensate for lost revenue in affected regions. This tax currently contributes around 2.8 billion euros annually to tax collection, representing just over one percent of total tax revenue in Spain.

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