On 1 March, the day after its 140th anniversary of the Economic Agreement, the Centre for Documentation on the Economic Agreement and the Basque provincial treasury departments, in cooperation with the Departments of Contemporary History and Public Law (Financial & Tax Law Area) of the University of the Basque Country, is to hold a seminar under the title “140 Years of the Economic Agreement and the Outlook for the Future“.

The opening address will be given by the Provincial Councillor for the Treasury in Bizkaia, José María Iruarrizaga, and by Joseba Agirreazkuenaga, holder of the Chair in Contemporary History and Director of the Centre.

The subsequent speakers will be Dr. Eduardo Alonso Olea, who will talk about the situation in 1878 after the end of the war, and the initial drawing up of the Economic Agreement, followed by former Chief Councillor of the Provincial Council of Araba/Álava Dr. Juan Mari Ollora, who will outline his experiences in negotiating for the recovery of the Economic Agreement in 1978.

After the break Dr. Mikel Erkoreka will talk about the dynamic nature of the Agreement and its continual adaptation, and the final presentation will be given by Dr. Iñaki Alonso Arce, who will discuss the challenges posed for the Economic Agreement in the framework of the European Union.

The event will end with a debate moderated by Dr. Susana Serrano Gazteluurrutia.

Programme for the seminar

In a ruling of October 16, 2017, the Constitutional Court ratified the legal principle established with the judgement of December 1, 2016 regarding the interpretation of the harmonising rule contained in Article 3 of the Economic Agreement, on the necessary adjustment of the tax system of the provinces to the General Tax Act in terms of terminology and concepts. The Court’s interpretation is that the “immobility of the amount arising from the correct application of the objective estimation is an intrinsic characteristic of that system for determining the tax base”. By failing to meet this characteristic, the precept challenged infringes the said harmonising rule and is unconstitutional and null and void.

For its part the High Court of Justice of the Basque Country, in its judgement of July 7, 2017, rejected the request for pecuniary liability made in the field of Tax on Retail Sales of Certain Hydrocarbons on the basis that this was a case of pecuniary liability of the legislating state, albeit with the distinctive feature of the intervention of the province, with the Provincial Law in question having been passed in the absence of authority over the regulation of the tax. The ruling division thus concludes that the legal principle emanating from the Supreme Court’s ruling of December 5, 2012 is applicable, which exempts the provincial administration acting as respondent from attributable liability, on the understanding that the causal relationship of the damages caused by the application of the tax corresponds solely and exclusively to the State Administration.

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The latest issue of the JADO newsletter of the Basque Academy of Law includes a paper entitled “El IVA en el País Vasco, de tributo concertado de normativa común a tributo concertado de normativa autónoma: encaje y repercusión en las operaciones intracomunitarias” (VAT in the Basque Country, from agreed taxation following common legislation to agreed taxation following regional legislation: fit with and impact on intra-Community transactions), one of the winners of the 1st Adrián Celaya Award for young lawyers, in which Victor Delgado González delves into the possibilities and consequences of assuming regulatory capability for indirect taxation and, more specifically, for Value Added Tax.

Forum Fiscal issue number 235 includes an article entitled “El plan BEPS y las operaciones vinculadas desde la perspectiva de los territorios forales” (The BEPS plan and related operations from the perspective of provinces with their own charters of law) by Ester Urruzola Moreno, in which she analyses certain regulatory measures to be implemented by the provincial authorities in the context of the OECD’s BEPS Plan and its adaptation within the European Union.

Finally, issue number 19 in 2017 of Quincena Fiscal includes a paper entitled “Concierto económico: algunas consideraciones generales” (Economic Agreement: some general considerations) by Javier Armentia Basterra, in which he reflects on core issues of the regime of the Agreement and its traditional, agreed nature, the fiscal harmonisation of provincial tax regimes, its position in the context of the European Union and the meaning of the ring-fencing of provincial laws.

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After its perceptive proceedings at the Parliament, the Official State Gazette of December 29 published Laws 10/2017 and 11/2017, of December 28, approving, respectively, the amendment to the Economic Agreement and the establishment of the Quota of the Basque Country for the 2017-2021 five-year period.

Law 10/2017 of December 28
Law 11/2017 of December 28

In rulings on May 12 and June 21, 2017, The Arbitration Board of the Economic Agreement accepted the legal principle handed down by the Supreme Court in its judgements of December 13, 2016 and January 31, 2017, in relation to each of the disputes brought before the Arbitration Board of the Agreement between the Treasury of the Autonomous Community and the State Tax Administration Agency (AEAT), which ruled that the operation consisting of supplying fuel to third party installations between a company and its customers, with the latter making cash payment by using a card issued by that company and accepted by the third party supplier was a delivery of goods, in contrast to the opinion of the AEAT, which saw it as a provision of financial services. Moreover, in a ruling on June 21, the Arbitration Board upheld the criterion of the Provincial Treasury of Alava in the dispute raised by the AEAT, in relation to the connection point applicable to supplies of goods when products have been transferred between the seller’s own premises located in territories subject to common and provincial legislations.

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