Spain: Potential recovery of Spanish energy taxes

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Spain: Potential recovery of Spanish energy taxes

intl-updates-small.jpg

Taxpayers may be able to recover several years of paid energy taxes under a long-awaited opinion from the Supreme Court on whether certain taxes are constitutional.

cobos.jpg

José María Cobos

Background

On January 1 2013, the Energy Sustainability Law 15/2012 of December 27 2012 was enacted, which introduced several new taxes to harmonise the Spanish tax system that intended to promote more efficient environmental and sustainability practices. These objectives of the Law inspired tax reform in Spain in line with the basic principles governing tax, energy and environmental policy in the European Union.

The Law created the following taxes, among others:

  • Tax on the production value of electricity;

  • Tax on the production of spent nuclear fuel and radioactive waste resulting from the generation of nuclear energy; and

  • Tax on storage of spent nuclear fuel and radioactive waste at centralised facilities.

Despite the environmental objectives of these taxes, doubts arose over the true aim of these new tax items and whether they complied with the Spanish Constitution and Community Directives.

Constitutional questions

In this context, the Supreme Court referred two requests to the Constitutional Court on June 14 2016, asking for a ruling on unconstitutionality in relation to these taxes. The Supreme Court has claimed the tax measures are unconstitutional on the grounds that they might infringe the "ability-to-pay" principle established in Article 31 of the Spanish Constitution.

The first request for a ruling on unconstitutionality referred to the tax on the production value of electricity. The Supreme Court said that there are serious doubts about its environmental aim, given that:

  • None of the elements that compose the tax are geared towards the internalisation of the environmental costs derived from the production of electricity;

  • It is observed that this tax is levied on the same ability to pay as that on which economic activities tax is charged; and

  • As there is no clear environmental aim to justify this double taxation, this tax could breach Article 31 of the Spanish Constitution.

The second request for a ruling on unconstitutionality referred to the tax on the production of spent nuclear fuel and radioactive waste resulting from the generation of nuclear energy, and the tax on storage of spent nuclear fuel and radioactive waste at centralised facilities. The Supreme Court considered that:

  • The objectives of the taxes are already covered by the charges established in the legislation of the electricity industry;

  • None of the elements in the make-up of the tax are aimed at discouraging pollution or stimulating other conducts;

  • These taxes are simply a charge on the production and storage of radioactive waste. Therefore, their true aim is to finance the tariff deficit of nuclear power plants; and

  • In short, the court has serious doubts about the environmental nature of these taxes and their compliance with Article 31 of the Constitution, as there could be several tax items being levied on the same manifestation of wealth.

The Supreme Court has not given an opinion on the possible incompatibility of these taxes with European Union law. The analysis of that question, if necessary, is being deferred until the Constitutional Court has ruled on the strictly national questions.

In view of this situation, while the doubts about the compatibility of these taxes are being resolved, taxpayers should consider whether to contest the self-assessments of these taxes to maintain the right to recover the excess amounts paid if these taxes are rendered null and void.

José María Cobos (jose.maria.cobos@garrigues.com), Madrid

Garrigues

Website: www.garrigues.com

more across site & shared bottom lb ros

More from across our site

Tax auditors themselves had not been aware of the new TP ‘transaction matrix’ requirements, ITR hears as five German partners share their client experiences
Its features include a built-in AI assistant as well as expert insights and commentary from Deloitte specialists
AI is rapidly finding its way into tax advisory services. But how can AI be deployed responsibly, reliably, and in compliance with legal standards?
Specified taxpayers will have to apply a 19% VAT rate on services offered by third parties through their platforms; in other news, Donald Trump imposed 30% South African tariffs
A ‘quiet revolution’ in HMRC’s compliance strategy has caused Adam Craggs to rethink how to advise clients, he tells ITR
If the Reform leader becomes UK prime minister then he may follow the direction of the US in at least one significant way
Trump declared a new national emergency in issuing the order; in other news, Grant Thornton Germany is up for sale and the subject of interest from both its UK and US counterparts
The judgment, which saw Denmark's Supreme Court rely on OECD TP guidance, sets aside more than 15 years of consistent administrative practice, experts have told ITR
Belgium’s new coalition government has gone ahead with a new exit tax regime that could land it in the courts
Brazil’s government has not officially framed the bill as a countermeasure amid trade tensions with the US, but the move is being considered as part of Brazil’s strategic response, one expert tells ITR
Gift this article