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In brief

The autonomous region’s tranche of the Special Tax on Hydrocarbons (STH) in force in Spain between 2013 and 2018 was contrary to the EU Energy Taxation Directive and should therefore be declared unlawful, as concluded by the Advocate General of the Court of Justice of the European Union (CJEU), Athanasios Rantos.

With regard to the Special Tax on Hydrocarbons

The STH is an excise duty that is levied upon the transfer of mineral oil products from the owner’s tax warehouse to the purchaser.

This accrual implies that the tax warehouse holder transfers the corresponding STH quota to the acquirer, who is responsible for bearing this cost. The tax warehouse holder collects the tax from the purchaser and submits the corresponding self-assessment to the tax authorities. The purchaser is not permitted to pass on the tax to their customers, but they may take it into account when determining the selling price of their products. The tax liability is determined by applying the appropriate tax bracket to the taxable base. This tax bracket is different for each mineral oil product.

The STH is regulated by Law 38/1992 of 28 December 1992 on excise duties (LED). However, it is a harmonized tax and its regulation must therefore comply with the provisions of European Union law and, in particular, with Council Directive 2003/96/EC of 27 October 2003 on the restructuring of the Community framework for the taxation of energy products and electricity.

In this regard, Final Provision Twenty of Law 2/2012, of 29 June 2012, on the General State Budget for 2012, introduced a new article 50.ter to the LED, which came into force on 1 January 2013. This article allowed the Autonomous Communities to apply a supplementary tax bracket to certain products (such as fuels or gas oils) purchased or consumed in their territory (“Autonomous Community Tranche“). The Autonomous Community Tranche was in force until 31 December 2018, when it was abolished by Law 6/2018, of 3 July 2018, on the General State Budget for 2018.

Between 2013 and 2018, there was a divergence among Autonomous Communities regarding the application of the Autonomous Community Tranche, resulting in a variation in the effective taxation of fuels and diesel fuels depending on the region of purchase during that period.

Some taxpayers affected by the Autonomous Regional Tax have expressed concerns that it may not be fully consistent with Article 5 of Directive 2003/96. They argue that this Article may not allow for the application of varying tax brackets within a Member State based on the location where the product is acquired or consumed. The taxpayers have brought forward several legal actions to challenge the compatibility of the Autonomous Community Tranche with Directive 2003/96, and to request the reimbursement of any overpaid amounts. The main matter at hand for the Supreme Court is to determine whether taxpayers who bore the tax burden are required to prove, and if so, how, that they did not transfer the tax burden to the fuel buyer, in order to avoid an unfair benefit from the tax refund.

Before ruling on the applications for reimbursement of the tax, the Supreme Court referred the matter to the CJEU on 15 November 2022, to seek clarification on whether the Autonomous Community Tranche of the STH is in compliance with Directive 2003/96.

Opinion of the Advocate General

On 25 January 2024, the Advocate General of the CJEU issued an opinion stating that Member States cannot establish a regional tax bracket for the STH, as Article 5 of the Directive must be interpreted as meaning that doing so would entail the application of a different regional tax for the same product and use, outside of the cases exhaustively provided for in the Directive. The decision was based on the following points:

  • According to Article 5, there is provision for differentiation of excise duties at the regional level within a Member State. However, as per Article 19 of the Directive, prior authorization from the Council is required. It appears that the Spanish Government did not obtain this authorization.
  • The protection afforded by Article 4(2) of the Treaty on European Union does not apply in this case, nor can the internal organization and division of competencies be invoked to justify an infringement of EU law.
  • The aim of Directive 2003/96 is the proper functioning of the internal market in the energy sector. The application of such differentiated tranches could undermine this functioning, fragment it, and jeopardize the free movement of goods.
  • Article 1(2) of Directive 2008/118 allows Member States to impose other indirect taxes on excisable products provided that (i) they are imposed for specific purposes and (ii) they comply with EU tax rules applicable to excise duties or VAT for the determination of the tax base and for the calculation of the tax liability, the chargeable event and the monitoring of the tax. As regards the first of the conditions, the Advocate General considers that the Autonomous Community Tranche of the STH is not structured in such a way as to achieve a specific purpose but is intended to finance the competencies of the Autonomous Communities in general.
  • Finally, the Advocate General invokes the principle of equal treatment which requires that comparable situations should not be treated differently unless such treatment is objectively justified. Justification which he cannot see in this case, since two taxable persons producing mineral oils in the same Member State will not be treated identically if they are required to bear different levels of taxation.

Preliminary conclusions

This opinion is not binding for the CJEU, although it hints at the possibility of a favorable ruling. We must now wait for the decision of the CJEU, which will be published in the coming months and which, if it follows the conclusions of the Advocate General, would maintain the same criterion that the CJEU established in February 2014 decreeing the nullity of the Tax on the Retail Sales of Certain Hydrocarbons, commonly known as “Céntimo Sanitario” and which is the predecessor of the Special Tax on Hydrocarbons in Spain.

Once the CJEU has issued its ruling, it will be necessary to determine to whom and under what mechanism the tax refund can be claimed. Considering that this is a monophasic tax, the taxpayers who are entitled to claim a refund, i.e., those who have levied the tax as well as those who have unduly paid it, will have the right to do so. In this regard, it will be necessary for the taxpayers who have paid the tax to prove that the tax has not been passed on, or for those who have paid it unduly to prove that they still have the invoices and/or documents necessary to prove the undue payment of the Autonomous Community Tranche. Another element of great importance will be to analyze how the CJEU resolves the temporal limitation of the effects of the judgment in granting the tax refund.

For further advice on whether your company qualifies and what steps you need to take, please do not hesitate to contact us.

Click here to read the Spanish version.


Montse Campmajó is an Associate in Baker McKenzie, Barcelona office.


Albert Arenas is an Associate in Baker McKenzie, Barcelona office.

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