The repeated failure of taxes on hydrocarbons as resources of the autonomous communities

Abstract

This paper analyzes the legal failure of two tax mechanisms implemented in Spain to fund the Autonomous Communities (CCAA) through hydrocarbon taxation. First, it examines the Retail Sales Tax on Certain Hydrocarbons (IVMDH), in force between 2002 and 2012, which was declared contrary to European Union Law by the Court of Justice (CJEU) in 2014. The reason was that said tax lacked a genuine “specific purpose” (health or environmental) distinct from a purely budgetary one, thus violating community directives. Subsequently, the paper analyzes the regional rate of the Special Tax on Hydrocarbons, applied between 2013 and 2018 to replace the previous one. In 2024, the CJEU ruled that this mechanism also infringed European regulations, as Directive 2003/96/EC prevents the establishment of differentiated tax rates by regions in harmonized taxes, barring strict exceptions that Spain did not meet. The authors conclude that national legislation repeatedly ignored the requirements of European fiscal harmonization, resulting in the expulsion of both taxes from the legal system.