EU court opinion says Spain fuel tax breaches law

Reuters News
Posted: Oct 24, 2013 8:57 AM

MADRID (Reuters) - An adviser to the European Union's top court recommended it rule that a Spanish fuel tax breaches EU law, potentially obliging Spain to pay billions of euros in compensation to fuel consumers.

Advocate General Nils Wahl, an adviser to the European Court of Justice, said in a written opinion on Thursday that the structure of the Spanish levy did not comply with EU excise duty laws because it does not "pursue a specific, non-budgetary purpose."

While the advocate general's opinion is not binding, the European Court of Justice usually follows such recommendations.

Spain created a "health cent" tax on the sale of hydrocarbons in 2003 to generate revenues to help finance healthcare spending by autonomous regions.

"Spain appears to have knowingly taken the risk of going forward with the legislation in question and, as a result, that legislation has been applied for many years to the detriment of the end-user and the internal market," Wahl said in his opinion.

The Spanish government, which Wahl said estimates the amount of the levies at 13 billion euros ($18 billion), has asked the court to avoid making the judgment retroactive if it finds that the tax does in fact breach EU law.

(Reporting by Tracy Rucinski; Editing by Julien Toyer/Ruth Pitchford)