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The TSJCV submits a preliminary ruling on the IVPEE to the ECJ

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Jaime Varanda analyzes the order that the TSJCV publishes in which it refers the question to the Court of Justice of the European Union (ECJ) regarding the possible infringement of Community law by the Tax on the Value of the Production of Electrical Energy (IVPEE)

The High Court of Justice of the Autonomous Community of Valencia (TSJCV) has published an order, dated 22 February 2019, in which it refers the question to the Court of Justice of the European Union (ECJ) regarding the possible infringement of Community law by the Tax on the Value of the Production of Electrical Energy (IVPEE).

Previously, the Supreme Court (TS) had raised a question of unconstitutionality regarding the tax, which the Constitutional Court rejected, considering that with the introduction of the IVPEE in our legal system, there was no situation of double taxation -together with the Tax on Economic Activities (IAE)- that contravened the principles of the Magna Carta.

Likewise, the TS itself, in its order of 10 January 2018, refused to refer the matter to the ECJ for a preliminary ruling, stating that the IVPEE did not present problems of adjustment with the legal system of the European Union.

However, the TSJCV argued its approach to the question referred for a preliminary ruling that the TS, in rejecting it, did not state the reasons for its decision and that, in a previous order, the TS itself had fully challenged the environmental purpose of the tax. 

Therefore, since the TSJCV had doubts as to the conformity of the IVPEE with Community law, even if the High Court had not done so, it has referred a question to the ECJ for a preliminary ruling, questioning the following aspects of the tax:

  • Whether the IVPEE turns out to be an indirect tax, with no specific purpose and with an exclusive will to collect, even though national law has configured it as a tax of a direct nature.
  • Whether the tax is essentially for the purpose of collection, despite its classification as an environmental tax.
  • If the IVPEE opposes the principle of free competition and promotion of renewable energy, by giving the same treatment to energy from renewable and non-renewable sources.
  • If the IVPEE distorts the Spanish electricity market by harming national electricity producers.

In short, the European Court of Justice is finally being given the opportunity to give its opinion on the conformity with European Union law of a tax which has been called into question on so many occasions. It is good news that the European Court can provide the necessary elements of interpretation to determine whether or not the tax conform with Community law in the end, an aspect that must be taken into account in the procedures carried out by the taxpayer in relation to the challenge of the IVPEE, and in those pending.

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