A fuel tax that Spain imposed in 2002 was illegal, Europe's highest court ruled today, clearing the way for consumers to claim back billions of euro and potentially knock Madrid's deficit-reduction programme off track.
The tax on fuel including petrol, diesel, heavy fuel oil and kerosene ran from January 1st 2002 to January 1st 2013.
The Court of Justice of the European Union (ECJ) in Luxembourg said it had been incompatible with the EU Excise Duty Directive because it did not have a specific purpose that must not be purely budgetary, such as an environmental aim.
Proceeds from the tax, set up to finance health care in Spain’s autonomous regions, were about €13 billion.
Consumers will have to provide receipts of purchase, meaning the government will almost certainly not have to pay back the whole sum.
But companies will have records. Catalan haulage company Transportes Jordi Besora SL, which brought the case to court, paid fuel duty of more than 45,000 euros for the years 2005-2008.
Madrid asked for back payments on the tax to be limited and said a payout in full would jeopardise public health spending.
But today’s ruling - which Spain cannot appeal against - found it was inappropriate to “limit the temporal effects of this judgment” because, in maintaining the tax for more than a decade, the Spanish authorities did not act in good faith.
Spain must cut its budget gap to 5.8 per cent of GDP - or around €60 billion - this year and to 4.2 per cent of GDP in 2015, to ensure it drops below 3 per cent in 2016 as requested by EU finance ministers last June. (Reuters)
