The Supreme Court has asked the European Justice whether the regional rates of the tax on hydrocarbons, in force until 2019, were in line with European law. The question referred for a preliminary ruling arises from an appeal filed by the oil company Disa. This had requested a refund of undue tax revenue between 2013 and 2019 for the regional section of the tax, “considering it contrary to European Union Law.” Now the decision is in the hands of the Court of Justice of the EU (CJEU).
The regional section of the tax entered into force in January 2013, allowing communities to set different rates. In 2019 it was removed and integrated into the special state rate. Disa had requested the return of income before the Tax Agency, arguing that the regional section of the tax collided with community legislation because the EU does not allow differentiated rates by territory. The ball passed from there to the roof of the Central Economic-Administrative Court, which did not resolve the matter and for this reason it was considered presumably dismissed.
The company did not give up and went to the National Court, which also rejected the appeal for refund of improper income. He alleged that Disa did not prove that the refund would not mean an “unfair enrichment”, since it did not submit sufficient documentation to ensure that the tax cost had not been passed on to fuel prices. Despite this, the judges recognized in the ruling, dated November 25, 2020, that the “legal doubts” about the interpretation of the community directive would lead “to the prejudicial question.” From there, the litigation jumped to the Supreme Court, which has suspended the procedure pending the ruling of the CJUE, which could give rise to million-dollar claims.
Sanitary cent
To understand the origin of this dispute, you have to go back almost a decade. It was 2014 when the CJEU declared the so-called sanitary cent —technically, Tax on Retail Sales of Certain Hydrocarbons (IVMDH)— contrary to EU law, and the Spanish justice established the first refund of what was improperly paid in the case Transport Jordi Besora. It was then determined that, as of 2013, the tax would be relocated to the hydrocarbons tax through two new rates, one special state and another regional, which could range between 0 and 4.8 cents per liter. This solution raised doubts, since the community norm does not allow differentiated rates for territorial reasons in the case of energy products and electricity.
The situation was corrected in 2019, when the regional section was harmonized at the national level and there were numerous refund requests from the operators. Among them was that of Disa, the only one that has given rise to a preliminary ruling to find out if the national standard complied with the Community one.
The Supreme Court raises the question to the CJEU in an order dated November 15, 2022, in which it asks if the 2003 directive that restructures the community regime for the taxation of energy products and electricity, in particular its article 5, “opposes a national standard, such as article 50.ter of Law 38/1992, of December 28, on Special Taxes, which authorized the autonomous communities to establish tax rates of the Special Tax on Hydrocarbons, differentiated by territory , in relation to the same product”.
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