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An overview by Garrigues, Taxand Spain
The Spanish Supreme Court has recently ruled that natural gas used in electricity and heat generation must be exempt from the Special Tax on Hydrocarbons, as required by EU Directive 2003/96/EC.
The court found that the tax, imposed by Law 15/2012, violated this directive by not properly addressing environmental policy requirements. It noted that the tax did not allocate its revenues to environmental efforts nor account for the varying environmental impacts of different energy sources, such as coal or natural gas. This ruling follows a 2023 CJEU decision on similar grounds regarding coal taxation.
Eduardo Abad from our Spanish member firm Garrigues has provided a more detailed overview of the decision here.
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