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Constitutional Court confirms constitutionality of tax on electricity production and Supreme Court interprets ROVER doctrine
Tuesday, 26 de March de 2019

In a ruling dated 17 January the Constitutional Court has confirmed the legality of Provincial Regulation 24/2014 of 9 July of the General Assembly of Álava on the tax on electricity production, with effects dating back to 1 January 2013, the date of the entry into force of the tax in the body of law of Spain.

The Court argues that the said provincial regulation is a response to the need for adaptation that results from Additional Provision Two of the Economic Agreement, with the time required for that adaptation to be put into effect by mutual accord between the central government and the regional autonomous community in order to include in it new taxes created by the central government through the relevant arrangements.

What the court considered a true case of back-dating is therefore only a consequence with a view to permitting the effective incorporation of the tax on the value of electricity production into provincial tax systems, determining the date of effect of the arrangements for the tax. It is not therefore, according to the Court, a problem of back-dating the tax on the value of electricity production, a tax that was already in existence, having been created by Act 15/2012 of the central government, but rather of back-dating the effects of the arrangements made for it to be integrated into the tax system of each respective historical territory and make it possible for the provincial councils to levy, manage, settle, collect and inspect it.

For its part the Supreme Court ruled on 31 January last to apply its doctrine as ruled in the ROVER case to a case in which the Board of Arbitration of the Economic Accord of Navarre had upheld the criteria applied by the Provincial Treasury Department.

In line with its previous rulings, the Court states that even though the corporate headquarters of the company is in Navarre and the industrial workshop where the personnel and materials used to direct the business are also located there, the fact that the operations of the company to acquire pigs (in the common territory or within the province), prepare them and transport to the place designated by the purchaser (be it in common territory, within the province or outside Spain) cannot be considered as irrelevant or merely ancillary.

These operations – other than the management functions centralised in the province – clearly also generate added value, as the operations performed elsewhere (be it in Navarre or in common territory) include such important tasks as receipt of goods, loading, unloading, storage, transportation from and to the relevant location and delivery to designated abattoirs can certainly not be classed as accessory or irrelevant.

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