Point of departure
During the years 2013 to 2018, under the Law 38/1992, of December 28The Special Tax Act allowed the autonomous communities to establish an autonomous tax rate, producing a differentiated tax depending on the place where the product subject to taxation was consumed.
Initially, it was analyzed whether based on article 5 of the Directive 2003/96 Article 50 ter. 1 of Law 38/1992, which granted the possibility for the autonomous communities to establish an autonomous tax rate on Hydrocarbons to additionally tax products consumed in their respective territories, was contrary to European Union law.
As of January 1, 2019, Article 50 ter of Law 38/1992 was repealed by the Law 6/2018, of July 3, of the General State Budget for 2018. With the following Statement of Reasons: “In terms of Special Taxes, the regional tax rate on Hydrocarbons is being integrated into the special state rate in order to guarantee market unity in the field of fuels and combustibles, without this measure implying a reduction in the resources of the Autonomous Communities and all within the framework of community regulations.”
Given all the doubts caused by the interpretation of Article 5 of the Directive, the Supreme Court referred a preliminary question to the Court of Justice of the European Union, which in Judgment of 30 May 2024 (case C-743/2022), struck down the autonomous section of the hydrocarbon tax, ruling that it is not possible to set different rates depending on the different Autonomous Communities.
Latest pronouncements of the Supreme Court
In the Supreme Court ruling 1502/2024 of September 25, 2024 The question of whether a final consumer, who has been charged the tax not by legal provision or obligation but by unilateral decision of the person or entity that owns the service station, is entitled to request the refund of undue income was raised as a matter of interest in the case.
Who is entitled to refund undue income from the Hydrocarbon Tax?
Pursuant to Article 14.1 of the Royal Decree 520 / 2005 The Supreme Court established that the oil companies were the ones who bore the legal impact of the tax, establishing doctrine regarding the identity of the party entitled to request and obtain the refund of undue income corresponding to the autonomous section of the IEH for petroleum product operators.
What is the legal line followed by the Supreme Court to resolve the prejudicial question?
For its reasoning, TS Ruling 1502/2024 resorts to the legal configuration of the Tax on Hydrocarbons as a single-phase consumption tax, which taxes products upon leaving the factory or tax warehouse, as established by articles 5 and 7 of the LIIEE (Excise Tax Law).
Establishing that the phase of the production and/or distribution process in which the tax is established determines the elements of the legal-tax relationship.
In short, the obligation to pass on the tax (and to do so separately on the invoice) is the sole responsibility of the taxpayer. As the Hydrocarbon Tax, unlike VAT, is monophased (payable only once), the legal pass-on will only occur once and must be made by the taxpayer.
From then on, the tax rates can be incorporated as another cost into the price of the product, without any “legal repercussions” in subsequent transactions of the taxed product.
In the successive sales and resales of fuels by the oil operator to successive intermediaries and distributors and service stations, there is no longer any type of tax accrual to be passed on, but only the determination of prices agreed between seller and buyer based on market conditions, which will determine the price.
Concluding that the appellant (service station) lacks standing based on article 14 of the LIIEE to request a refund of the Tax, as this is not a case of direct delivery as this concept is conceived in the definition contained in article 4.12 of the LIIEE.
Furthermore, the Supreme Court points out that there is no legal basis in our legal system that allows a consumer who is not part of the legal-tax relationship to directly claim from the State the refund of a tax that has been borne illegally.
Who should make the return?
The Supreme Court has established in Judgment 4712/2024 of September 30, 2024 It will be the autonomous administrations that must return these amounts, without prejudice to the internal adjustments made between the State and the autonomous communities.
What other avenues are available to end consumers to obtain a refund?
The Supreme Court reasons that it is not contrary to European Union Law not to grant the final consumer the right to request the refund of an undue tax because it is contrary to Union Law, since it is not the final consumer who has paid that tax to the tax authorities, nor who has borne the legal repercussions thereof, without prejudice to being able to resort to the following avenues:
- To exercise a civil action for the return of what is undue against the passive subject or legally affected party.
- To resort to the Patrimonial Responsibility of the legislative State for violation of European Union Law.
Guillermo Camarelles
Senior Tax Area Collaborator at Tomarial
