Inheritances below one million euros not taxable in Galicia starting in 2020 (and other new measures)

Spain - 

Spain Tax Alert

On December 27, 2019 the Official Galicia Gazette published Law 7/2019, of December 23, 2019, on tax and administrative measures for the autonomous community of Galicia, introducing measures related to devolved taxes and coming into force on January 1, 2020.

The main new legislation is summarized below.

1. Personal income tax

a) Tax credits for investments in companies: 

Legislative Decree 1/2011, of July 28, 2011, for the autonomous community of Galicia, allows a tax credit for acquisition of shares in companies as a result of resolutions for formation of companies or capital increases at Spanish corporations, limited liability companies, worker-owned companies and cooperatives (investment tax credit); and an increased credit where, additionally, financing is provided for the entities in which the investment is made (investment and financing tax credit).

To be eligible for those tax credits, the taxpayer's interest, jointly with the interests of the taxpayer’s family members up to the third degree, cannot be above 40%.  Starting in 2020, this investment limit will not apply in the cases of worker-owned companies or cooperatives composed only of two partners, for as long as this status continues.

b) New tax credits deducted from the autonomous community component of gross tax payable:

  • Tax credit for works intended to increase energy efficiency in buildings used for dwellings or single-family dwellings. This tax credit will amount to:
    • 15% of the amounts invested, with a maximum tax credit base equal to €9,000 for each taxable person.
    • The cost of the fees for obtaining the certificate evidencing the energy efficiency rating for the building and the fees related to its entry on the Energy Efficiency Certificate Register, subject to a limit of €150.


  • Tax credit for aid and subsidies received by high-level athletes from Galicia, provided the taxpayer includes them in the general component of taxable income for personal income tax purposes and the sport activities do not generate income from economic activities.  The amount of the tax credit is obtained by applying the average tax rates to the subsidy or public aid included in net taxable income.

2. Inheritance and gift tax

a) Family member reductions: The reduction for family members in group II (descendants and adopted descendants aged 21 or over, spouses, ascendants and adopters) applicable for mortis causa acquisitions is increased up to Euro 1,000,000.

b) Family business reductions: The application of reductions for inter vivos or mortis causa acquisitions of family businesses requires that a specific interest is held in the family business, either individually or jointly with the spouse, ascendants, descendants or collateral relatives up to a specific degree, by consanguinity, affinity or adoption.

With the aim of ensuring that family businesses stay within the family and to strengthen business in the region, the degree of kinship for satisfaction of the joint investment requirement has been extended to the sixth degree with the deceased, by consanguinity, affinity or adoption. 

3. Transfer and stamp tax

A new 6% rate has been introduced, for transfer tax under the transfers for a consideration heading, for the acquisition of dwellings in parish areas that are classed as sparsely populated or rural areas according to the Order of February 9, 2017. 

The rate is reduced to 5% if additionally it is the taxpayer’s principal residence and the taxpayer's assets are below €200,000 plus an additional €30,000 for each member of the family unit in addition to the first member.