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Spanish Tax On Wind Turbines Lawful, ECJ Says

by Ulrika Lomas, Tax-News.com, Brussels

22 September 2017


The European Court of Justice has dismissed taxpayers' complaints about a Spanish levy on wind turbines.

The applicants in the combined cases in the main proceedings operate wind turbines designed to produce electricity in the territory of the Autonomous Community of Castile-La Mancha, Spain.

Having paid the levy in 2011 and 2012 and subsequently failed to challenge and request repayment of the levy from the tax authorities, the company brought a legal challenge against the tax, contesting that it is constitutional and contravenes EU law.

However, in Elecdey Carcelen SA and Others v. Comunidad Autónoma de Castilla-La Mancha (Joined Cases C-215/16, C-216/16, and C-220/16), the European Court of Justice found that the levy does not breach EU law.

First, it noted that Directive 2009/28/EC, on the promotion of the use of energy from renewable sources, provides that member states should seek to promote activities that will help to fulfill environmental goals. However, it noted that none of the relevant provisions precludes member states from imposing a levy, such as that at issue in the cases in the main proceedings, on wind turbines designed to produce electricity. It says that member states may introduce support schemes for the adoption of renewable sources of energy but they are not compelled to do so, the ECJ said.

Further it found that it is not in contravention of provisions in Council Directive 2008/118/EC, concerning the general arrangements for excise duty, since it is not an indirect tax, stating: "the levy does not constitute a tax imposed on the consumption of energy products or electricity, and, therefore, does not fall within the scope of that directive."

It also said it falls outside the scope of Council Directive 2003/96/EC, restructuring the Community framework for the taxation of energy products and electricity, since that levy does not tax energy products or electricity.

The ECJ therefore ruled that the Spanish territory in introducing a tax on turbines has not breached EU law.

The levy is charged based on the number of wind turbine units deployed, with a EUR489 levy per turbine on wind farms with 3 to 7 turbines; a EUR871 levy per turbine on those with 8 to 15; and a levy of about EUR1,200 per turbine for those with more than 15 wind turbine units.

TAGS: environment | tax | energy | law | excise duty | Spain | Europe | Other

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