Top European Court rules against health tax imposed on fuels

ECJ argues that the levy breaches directive on special levies

Brussels / Madrid - 27 feb 2014 - 15:24 UTC

The European Court of Justice (ECJ) has ruled that a tax imposed by the Spanish government on fuels to help finance the public health system is illegal and ordered the 13 billion euros raised from it between 2002 and 2011 to be returned.

In a ruling made public on Thursday the court argued that the tax raised by regional governments was not specifically aimed at alleviating the impact of the environmental damage caused by fossil fuels, which are also subject to other taxes, and therefore breached a European Union directive on special taxes.

The legislation governing the imposition of the tax, which is known in Spanish as the céntimo sanitario, the health cent, was amended in January 2013 to bring it in line with European Union law.

The court also rejected a request by the Spanish government that it be exonerated from having to return the tax, ruling that the administration had imposed it in bad faith given the ECJ had already ruled against a similar levy in 2000, while the European Commission had already initiated sanction proceedings against Spain on the issue.

The case stemmed from a suit filed by a Catalan transport company Transportes Jordi Besora, which the Catalan regional High Court passed on to the European Court of Justice to rule on the tax’s compatibility with EU legislation.

The court’s ruling does not establish any framework for how the tax paid is to be returned. In theory, any individual could ask for their money back but would need receipts to be able to do so.

Finance Minister Cristóbal Montoro said Spain had consulted with the European Commission before imposing the tax, but had no choice but to heed the ruling of the court. He said the government would have to analyze the potential impact on its finances.

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