The Court of Justice of the European Union (CJEU) has issued a judgment in the case of:Transportes Jordi Besora SL v. Generalitat de Catalunya, C-82/12 [27 February 2014] ruling that the Spanish tax on retail sales of diesel and petrol is contrary to EU law. The CJEU also concluded that it would not be appropriate to limit the temporal effects of this judgment because the Spanish government and the Generalitat de Catalunya did not act in good faith in maintaining that tax in force for a period of more than 10 years.

Summary of the judgment:

The EU excise duty directive concerns mineral oils including petrol, diesel, heavy fuel oil, and kerosene. The rules prevent additional indirect taxes from improperly obstructing trade in the EU. However, the directive provides that mineral oils may be subject to indirect taxation other than the harmonized excise duty established by the directive when two conditions are satisfied.  These conditions are that (a) The tax must pursue one or more specific purposes; and (b) the tax must comply with the rules applicable to excise duty or VAT concerning the determination of the tax base and the calculation, chargeability, and monitoring of the tax.

Relying on the option provided for in the directive, Spain established a tax — called the IVMDH — on the retail sale of certain hydrocarbons.  The IVMDH remained in force in Spain from 1 January 2002 to 1 January 2013, when it was integrated into the harmonized excise duty on mineral oils.

A haulage company established in the autonomous community of Catalonia paid, as a final consumer,  over €45,000 in respect of the IVMDH between 2005 and 2008. Taking the view that the IVMDH was incompatible with the directive, the company asked for a refund of the amount paid.

However, the Spanish court referred to the CJEU the question as to whether the IVMDH was compatible with the excise duty directive. The CJEU on 27 February 2014 found that the IVMDH is contrary to the excise duty directive.