has been referred to the 's Court of Justice after being accused of "discriminatory tax treatment of non-resident taxpayers". The European Commission announced the dramatic move this week, saying Spain had "failed to remedy an infringement in relation to the free movement of capital".

The Commission, the bloc's executive arm, has accused the European country loved by Brits of imposing a more burdensome tax structure on non-residents. This category, the Commission claimed, hasn't been given the option to defer tax payments over a transfer of assets, something residents can do. The Commission said in a statement: "When a payment for transfer of assets is deferred for longer than a year or is paid in instalments over a period longer than a year, resident taxpayers may pay the tax either when the capital gain accrues or proportionally deferred on a cash flow basis.

"However, non-resident taxpayers are not offered this possibility of deferral and must pay the tax when the capital gains accrue at the time of the transfer of the assets."

Non-resident taxpayers are people who live in the country for fewer than 183 days a year. Despite not being considered residents, they still have to pay tax on properties they own or income earned from employment in Spain.

The Commission said Spain has maintained the legislation complies with law, but the body "considers that efforts by the national authorities have, to date, been insufficient".

The difference in treatment between residents and non-residents infringes upon the 's principle of free movement of capital, with the Commission believing Spanish tax law is creating an unjustified barrier to cross-border transactions.

The European Commission is the 's executive body, responsible for proposing legislation and ensuring laws are properly applied.

More British expats live in than anywhere else in the . Approximately 412,000 Brits were living in the country as of November 2023.

The Spanish economy is booming, with GDP growing by 3.2% last year.

The sun-soaked nation is also much-loved by tourists, including Brits, and in 2024 welcomed a record 94 million foreign visitors.

The large influx of holidaymakers has sparked calls for change among residents in the most famous hotspots. across were held last year, notably in Barcelona, the Balearics and Canary Islands.