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20.12.2011 Official
Journal
of
the
European
Union L
336/81
RECOMMENDATIONS
COMMISSION RECOMMENDATION
of 15 December 2011
regarding relief for double taxation of inheritances
(2011/856/EU)
THE EUROPEAN COMMISSION,
(6) If
these
cases
result
in
inheritances
across
borders
upon
the death of an individual, more than one Member State
may have the right to apply inheritance taxes to those
bequests.
Having regard to the Treaty on the Functioning of the European
Union, and in particular Article 292 thereof,
(7) Member
States
have
few
bilateral
conventions
to
relieve
double or multiple taxation of inheritances.
Whereas:
(8) Most
Member
States
provide,
through
legislation
or
administrative practices adopted unilaterally at national
level, for double taxation relief for foreign inheritance
(1)
Most Member States apply taxes upon the death of a
taxes.
person, notably inheritance and estate taxes while some
Member States may tax inheritances and estates under
other tax headings, such as income. All taxes applied
upon the death of a person are hereafter called
(9) However,
those
national
systems
of
relief
for
foreign
inheritance taxes.
inheritance tax generally have limitations. In particular
they may have a limited scope as regards the taxes and
persons covered. They may not allow credit for
previously paid gift taxes on the same inheritance or
(2) Most
Member
States
that
apply
inheritance
taxes
also
for taxes applied at local or regional rather than
apply taxes to gifts between living persons.
national level, or for all taxes levied by other countries
upon death. They may only grant relief for foreign taxes
paid on certain foreign property. They may not grant
relief in respect of foreign tax on a property situated in
a country other than that of the heir or deceased. They
(3) Member
States
may
tax
inheritances
on
the
basis
of
may exclude foreign tax on assets located within the
varying ‘connecting’ factors. They may do so on the
territory of the Member State granting relief. The
basis of a personal link such as the residence, domicile
national systems of relief may also fail because they do
or nationality of the deceased, or the residence, domicile
not have regard to mismatches with inheritance tax rules
or nationality of the heir, or both. Some Member States
in other Member States, particularly regarding what is to
may apply more than one of these factors or may apply
be considered as a local compared to a foreign asset, and
anti-abuse measures that entail an extended concept of
regarding the timing of the transfer of assets and the date
domicile or residence for tax purposes.
when tax is due. Finally, tax relief may be subject to the
discretion of the competent authority and may not,
therefore, be guaranteed.
(4) In
addition
to
taxing
on
the
basis
of
a
personal
link,
Member States may apply inheritance tax to assets
located in their jurisdictions. Tax may be applied on
(10) The
absence
of
appropriate
ways
of
relieving
cumulative
this basis even if neither the deceased nor the heir has
taxation of inheritances may lead to overall levels of
a personal link with the country of location.
taxation that are appreciably higher than those applicable
in situations that are purely internal to one or other of
the Member States involved.
(5)
Increasing numbers of citizens of the Union are moving
during their lifetimes from one country to another within
(11) This
may
hinder
EU
citizens
from
benefiting
fully
from
the Union to live, study, work and retire, and are
their right to move and operate freely across borders
purchasing property and investing in assets in countries
within the Union. It may also create difficulties for the
other than their home countries.
transfer of small businesses on the death of owners.

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L 336/82
EN
Official Journal of the European Union
20.12.2011
(12) While revenues from inheritance taxes represent a
(18) Conflicts
of
personal
links
to
several
Member
States
relatively low share of the overall tax revenue of
could be solved on the basis of a mutual agreement
Member States, and cross-border cases alone account
procedure involving tie-breaker rules to determine the
for far less, double taxation of inheritances may have a
closest personal link.
major impact on the individuals affected.
(19) Since the timing for the application of inheritance tax
may differ in the Member States involved and cases with
(13) Double
taxation
of
inheritances
is
not
currently
being
cross-border elements may take significantly longer to be
resolved comprehensively at national or bilateral level,
resolved compared to domestic inheritance tax cases due
or on the basis of Union law. In order to ensure the
to the necessity of dealing with more than one legal
smooth functioning of the internal market a more
and/or tax system, Member States should allow claims
comprehensive system for granting relief for double
for tax relief for a reasonable period of time.
inheritance tax in cross-border cases should be
encouraged.
(20) This
Recommendation
promotes
the
fundamental
rights
recognised in particular by the Charter of Fundamental
Rights of the European Union, such as the right to
property (Article 17), which specifically guarantees the
(14) An
order
of
priority
of
taxing
rights
or,
conversely,
of
right to bequeath lawfully acquired possession, freedom
granting relief should be provided in cases where two or
to conduct business (Article 16) and EU citizens’ freedom
more Member States apply inheritance taxes to the same
to move freely within the EU (Article 45),
inheritance.


HAS ADOPTED THIS RECOMMENDATION:
(15) As a general rule, and in line with the practice
predominantly followed at international level, Member
1. Subject
matter
States in which immovable property and business
property of a permanent establishment is situated
1.1. This
Recommendation
sets
out
how
Member
States
can
should, as the State with the closest link, have the
apply measures, or improve existing measures, to relieve
primary right to apply inheritance tax to such property.
double or multiple taxation caused by the application of
inheritance taxes by two or more Member States (here
inafter ‘double taxation’).
(16) Since movable property that is not the business property
of a permanent establishment can easily shift location, its
1.2. This
Recommendation
relates
by
analogy
to
gift
taxes,
link to the Member State where it happens to be located
where gifts are taxed under the same or similar rules
at the time of death is, in general, considerably less close
as inheritances.
than the personal links that the deceased or the heir may
have with another Member State. The Member State
where such movable property is situated should,
2. Definitions
therefore, exempt the property from its inheritance
taxation if such taxation is applied by the Member
For the purpose of this Recommendation the following
State with which the deceased and/or the heir has a
definitions apply:
personal link.
(a) ‘inheritance tax’ means any tax levied at national,
federal, regional, or local level upon death, irre
(17) Inheritances have often been accumulated over the
spective of the name of the tax, of the manner in
lifetime of the deceased. Moreover, the assets contained
which the tax is levied and of the person to whom
in an inheritance are more likely to be located in the
the tax is applied, including in particular estate tax,
Member State to which the deceased has personal links
inheritance tax, transfer tax, transfer duty, stamp
than in the Member State to which the heir has such
duty, income and capital gains tax;
links, if different. When taxing inheritances on the basis
of personal links to their territory, a majority of Member
States refers to the links of the deceased rather than to
(b) ‘tax relief’ means a provision contained in legislation
those of the heir, albeit several also or only tax if the heir
and/or general administrative instructions or
has a personal link to their territory. Because of the said
guidance whereby a Member State grants relief for
nature and importance of the personal links of the
inheritance tax paid in another Member State, by
deceased as well as for practical reasons, double
crediting the foreign tax against tax due in that
taxation due to the fact that the deceased and the heir
Member State, by exempting the inheritance or
have personal links to different Member States should be
parts of it from taxation in that Member State in
relieved by the Member State to which the heir has
recognition of the foreign tax paid or by otherwise
personal links.
refraining from the imposition of inheritance tax;

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EN
20.12.2011 Official
Journal
of
the
European
Union L
336/83
(c) ‘assets’ means any movable and/or immovable
State with which neither the deceased nor the heir has a
property and/or rights that are subject to inheritance
personal link should refrain from applying inheritance
tax;
tax provided that such tax is applied by another
Member State by reason of the personal link of the
deceased and/or the heir to that other Member State.
(d) ‘personal link’ refers to the link of a deceased or heir
with a Member State, which may be based on
domicile, residence, permanent home, centre of vital
interests, habitual abode, nationality or centre of
4.3. Tax
relief
in
cases
where
the
deceased
had
a
personal
link
effective management;
to a Member State other than that to which the heir has
a personal link
Subject to paragraph 4.1, in cases where more than one
For the purposes of point (a) previously paid gift tax on
Member State can apply taxation to an inheritance on the
the same asset is considered as inheritance tax for the
basis that a deceased had personal links with one
purposes of granting tax credit.
Member State and the heir has personal links with
another Member State, then the second Member State
should give tax relief for the tax paid on the inheritance
in the Member State with which the deceased had
The terms ‘permanent establishment’, ‘immovable
personal links.
property’, ‘movable property’, ‘resident’, ‘domicile/
domiciled’, ‘national/nationality’, ‘‘habitual abode’, and
‘permanent home’ have the meaning applicable under
the domestic law of the Member State applying the term.
4.4. Tax relief in cases of multiple personal links of a single
person
3. General
objective
Where, on the basis of provisions of different Member
States, a person is deemed to have a personal link with
The recommended measures aim at resolving cases of
more than one taxing Member State, then the competent
double taxation, so that the overall level of tax on a
authorities of the Member States concerned should
given inheritance is no higher than the level that
determine through mutual agreement, in accordance
would apply if only the Member State with the highest
with the procedure set out in point 6 or otherwise, the
tax level among the Member States involved had tax
Member State that should grant tax relief if inheritance
jurisdiction over the inheritance in all its parts.
tax is applied in a State with which the person has a
closer personal link.
4. Provision
of
tax
relief
When applying inheritance taxes, Member States should
4.4.1. A closer personal link of an individual could be
grant tax relief in accordance with points 4.1 to 4.4.
determined as follows:
4.1. Tax
relief
in
respect
of
immovable
property
and
movable
(a) he could be deemed to have a closer personal link
property of a permanent establishment
with the Member State in which he has a permanent
home available to him;
When applying inheritance taxes, a Member State should
allow tax relief for inheritance tax applied by another
Member State on the following assets:
(b) if the Member State referred to in (a) does not tax or
if the individual has a permanent home available to
him in more than one Member State, he could be
(a) immovable property situated in that other Member
deemed to have a closer personal link with the
State;
Member State with which his personal and
economic relations are closer (centre of vital
interests);
(b) movable property which is the business property of a
permanent establishment situated in that other
Member State.
(c) if the Member State referred to in (b) does not tax or
if the Member State in which the individual has his
centre of vital interests cannot be determined, or if he
4.2. Tax
relief
in
respect
of
other
kinds
of
movable
property
has not a permanent home available to him in any
Member State, he could be deemed to have a closer
In respect of movable property other than business
personal link with the Member State in which he has
property as referred to in paragraph 4.1(b), a Member
an habitual abode.

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L 336/84
EN
Official Journal of the European Union
20.12.2011
(d) if the Member State referred to in (c) does not tax or
7. Follow-up
if the individual has an habitual abode in more than
one Member State or in no Member State, he could
7.1. Member States should continue working on possible
be deemed to have a closer personal link with the
ways to improve the cooperation of tax authorities,
Member State of which he is a national.
including at local and regional level, in order to assist
taxpayers who are subject to double taxation.
4.4.2. In the case of a person other than an individual, such as
7.2. Member
States
should
also
adopt
a
coordinated
position
a charity, its closer personal link could be deemed to be
in discussions at the Organisation for Economic Coop
with the Member State in which its place of effective
eration and Development (OECD) on inheritance taxes.
management is situated.
7.3. The
Commission
will
follow
up
on
the
Recommendation
5. Timing
of
application
of
the
tax
relief
with Member States and publish a report on the state of
play of cross-border relief for inheritance taxes within the
Member States should allow tax relief for a reasonable
Union three years after the adoption of the Recommen
period of time, e.g. 10 years from the time limit by
dation.
which inheritance taxes that they apply have to be paid.
8. Addressees
6. Mutual
agreement
procedure
This Recommendation is addressed to the Member States.
Where necessary in order for the general objective set out
in point 3 to be attained, Member States should operate
a mutual agreement procedure to deal with any disputes
Done at Brussels, 15 December 2011.
connected with double taxation, including conflicting
definitions of movable and immovable property or of
For the Commission
the location of assets or the determination of the
Member State which should provide tax relief in a
Algirdas EMETA
given case.
Member of the Commission

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