In its decision dated 12 November 2012, the Supreme Court confirmed the ruling of first instance which quashed the agreement of the Central Administrative Economic Tribunal that, by breaching the duty to abstain envisaged in Article 66 of the Agreement, had entered into the substance of the matter in question, relating to the consideration of the operations performed in Navarra for the purposes of determining the volume of operations  attributable to the “common territory”,  failing to recognise the jurisdiction of the Board of Arbitration of the Economic Agreement. The latter will need to be the one that rules on the disputed matter.

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On 14 November, the Constitutional Court issued its ruling where it confirmed the authority of the Autonomous Community of Navarra to create new taxes other than those officially envisaged in the Agreement.  Yet it based its arguments on the LOFCA (Financing of the Autonomous Communities Act), outside the Agreement, as “the local taxes that have not been previously agreed between the State and the Autonomous Community of Navarra are therefore not by definition agreed taxes or form part of the essential content of the special tax arrangement”.   There were three dissenting votes by the judges of the High Court against the majority doctrine.

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The latest issue of the Basque tax journal Zergak, Revista Tributaria del País Vasco contains part one of an article in which Gemma Martínez Bárbara, Head of the Fiscal Policy Area of Bizkaia Provincial Council, analyses various points that emerge from tax harmonisation in the Basque Country, from an internal viewpoint and in regard to the constraints on regulatory capabilities imposed by European regulations and the contents of the Economic Agreement between the Basque and central Spanish authorities.

Issue 3 of Cuadernos Manuel Giménez Abad, published in June 2012, includes a piece by Prof. Antoni Zabalza, holder of the Chair of Economic Analysis at the University of Valencia, in which he compares the financing systems of the “common area” and the Basque regions and assesses the proposal by the Catalan government for a tax covenant, pointing out its technical weak points.

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Arantza  González López,  a lawyer at the Basque Government Department of Justice and Public Administration, analyses the importance of the amendment of Article 135 of the Constitution, which raises the principle of budget stability to constitutional level, for the status of the competences of Basque institutions (Basque government and provincial councils).

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Dr. Bruno Peeters of the Business & Law Research Group at the Faculty of Law of the University of Antwerp has published an article in the latest issue of EC Tax Review in which he examines the issues that Member States need to take into account in regard to European regulations on the decentralisation of fiscal competences, especially the principle of non discrimination, fundamental freedoms and policy on state aid.

Gemma Martínez Bárbara, head of the Fiscal Policy Department of the Bizkaia Provincial Council, analyses the opinions of advocates general in cases involving the selectiveness of fiscal measures adopted by sub-state organisations since 1999 (the case of the Basque Country) up to the most recent cases (UGT-Rioja,  Azores & Gibraltar).

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