Judgment;Summary — ECLI:EU:C:2021:163
Date: 2021-03-03
Language of the case: Spanish
Court formation: Tenth Chamber
Subject matter: Energy;Environment;Right of establishment;Taxation;Principles, objectives and tasks of the Treaties;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-220/19 — 1 
Case C-220/19 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
11 March 2019 
Referring court: 
Tribunal Superior de Justicia de la Comunidad Valenciana 
(Valencia, Spain) 
Date of the decision to refer: 
22 February 2019 
Appellant: 
Promociones Oliva Park, S.L. 
Respondent: 
Tribunal Económico Administrativo Regional (TEAR) de la 
Comunidad Valenciana 
  
Subject matter of the main proceedings 
The dispute stems from an appeal brought in administrative proceedings by the 
commercial company PROMOCIONES OLIVA PARK, S.L. against the decision 
of 28 September 2017 of the Tribunal Económico Administrativo Regional de la 
Comunidad Valenciana (Regional Economic and Administrative Court for the 
Community of Valencia) dismissing the challenge to the decision of the Oficina 
Gestora de Impuestos Especiales de Valencia (Excise Duty Office, Valencia) 
which refused an application to rectify the payments made under self-assessment 
in respect of the tax on the value of electricity production (IVPEE) for the years 
2013 to 2016 and refused repayment of EUR 12 609.58. The appeal is 
representative of over one thousand three hundred joined cases that have 
temporarily been stayed. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-220/19 
 
2  
Purpose and legal basis of the request for a preliminary ruling 
1 The request for a preliminary ruling contains four questions, in which the referring 
court asks whether certain provisions of the Spanish law establishing and 
regulating the IVPEE are compatible with the European Union (EU) directives on 
the taxation of energy products, general arrangements governing excise duty, 
promotion of the use of energy from renewable sources and common rules for the 
internal market in electricity. 
Questions referred 
Having stayed proceedings, the referring court puts the following questions to the 
Court of Justice for a preliminary ruling on interpretation pursuant to Article 267 
TFEU: 
‘QUESTION ONE: Should Article 1(2) of Directive 2008/118/EC be interpreted 
as precluding and being incompatible with a tax such as the IVPEE, which is 
nominally a direct tax but which, having regard to its true nature, is actually an 
indirect, purely revenue-raising, tax without a specific purpose, given that the 
classification of the tax under national law cannot override the interpretation 
provided by EU law, which is governed by the objectives of EU law and reflects 
the objective characteristics of the tax in question? 
QUESTION TWO: In spite of the fact that it is classed as an environmental tax, is 
the fundamental aim of the IVPEE to raise revenue, in that activities involving the 
production of electricity and its incorporation into the electricity system are taxed 
in the same way, regardless of their intensity and environmental impact, in breach 
of Article 1, Article 3(1) and (2) and Article 3(3)(a) as read with Article 2(k) of 
Directive 2009/28/EC? 
QUESTION THREE: Should the principle of free competition and promotion of 
energy from renewable sources be interpreted as precluding the IVPEE, since it 
applies the same fiscal treatment to energy from non-renewable and from 
renewable sources, thus discriminating against the latter and breaching the support 
scheme established in Article 2(k) and related provisions of Directive 
2009/28/EC? 
QUESTION FOUR: Finally, do the aforementioned principle of free competition 
and Articles 32, 33 and 34 of Directive 2009/72/EC (CHAPTER VIII, 
ORGANISATION OF ACCESS TO THE SYSTEM) preclude the IVPEE, on the 
grounds that it permits positive discrimination in favour of non-national electricity 
producers, to the detriment of Spanish producers, thereby distorting the internal 
electricity market and access to the system?’ 
PROMOCIONES OLIVA PARK 
 
3 
Provisions of EU law cited 
The referring court believes that the national legislation referred to above may be 
in breach of the following provisions: 
(a) Article 1(1)(a) of Council Directive 2003/96/EC of 27 October 2003 
structuring the Community framework for the taxation of energy products and 
electricity, which prohibits the creation of indirect taxes on energy products and 
electricity unless they have a specific purpose. 
(b) Article 1(2) of Council Directive 2008/118/EC of 16 December 2008 
concerning the general arrangements for excise duty and repealing Directive 
92/12/EEC, in so far as it lays down general arrangements in relation to excise 
duty which is levied directly or indirectly on the consumption of certain goods, 
including electricity. The provision stipulates that ‘Member States may levy other 
indirect taxes on excise goods for specific purposes, provided that those taxes 
comply with the Community tax rules applicable for excise duty or value added 
tax as far as determination of the tax base, calculation of the tax, chargeability and 
monitoring of the tax are concerned’. 
(c) Article 1, Article 3(1) and (2) and Article 3(3)(a) as read with Article 2(k) of 
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 
2009 on the promotion of the use of energy from renewable sources and amending 
and subsequently repealing Directives 2001/77/EC and 2003/30/EC. 
(d) Directive 2009/72/EC of the European Parliament and of the Council of 
13 July 2009 concerning common rules for the internal market in electricity and 
repealing Directive 2003/54/EC, which governs third-party access to the system 
(Article 32 to 34) in an objective and non-discriminatory manner. 
Provisions of national law cited 
Ley 15/2012, de 27 diciembre de 2012, de medidas fiscales para la sostenibilidad 
energética (Law 15/2012 of 27 December 2012 on tax measures to promote 
energy sustainability; ‘Law 15/2012’) is part of a series of legislative changes to 
the financial arrangements governing the Spanish electricity system, and deals in 
particular with taxation of electricity. In the view of the referring court, Law 
15/2012 — specifically the IVPEE, which is governed by Title I of the Law — 
clearly affects areas governed by EU law, such as the environment and the 
electricity sector. The following specific provisions of Law 15/2012 are decisive 
for the resolution of the present case: 
Article 1. Nature. 
‘The tax on the value of electricity production is a direct impersonal tax imposed 
on activities concerning the production of electricity, measured in terms of net 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-220/19 
 
4  
production, and its incorporation into the electricity system, by means of each of 
the facilities referred to in Article 4 of this Law.’ 
Article 2. Territorial scope. 
‘1. The tax shall apply throughout Spanish territory.’ 
Article 4. Taxable event. 
‘1. The taxable event is the production of electricity, measured in terms of net 
production, and its incorporation into the electricity system on the mainland and in 
the island and non-peninsular territories, at any of the facilities referred to in ... 
Ley 54/1997, de 21 de noviembre, del Sector Eléctrico (Law 54/1997 of 
21 November 1997 on the Electricity Sector).’ 
Article 5. Taxpayers 
‘The tax is to be paid by natural or legal persons and the entities referred to in 
Article 35(4) of Ley 58/2003, de 17 de diciembre, General Tributaria (Law 
58/2003 of 17 December 2003 on general taxation) who carry on the activities 
referred to in Article 4.’ 
Article 6. Tax base. 
‘1. The tax base shall comprise the total amount to be received by the taxpayer 
in respect of the net electricity produced and incorporated into the electricity 
system by each facility during the tax period. 
For these purposes, the total amount shall comprise the payments included in all 
the financial arrangements established under Law 54/1997 of 27 November 1997 
on the Electricity Sector during the relevant taxable period and the payments 
provided for under the specific financial arrangements for the production of 
electricity and its incorporation into the electricity system in the island and non-
peninsular territories ...’ 
Article 8. Tax rate. 
‘The Tax shall be levied at a rate of 7%.’ 
Second additional provision. Costs of the electricity system. 
‘The General Finance Laws approved each year shall allocate an amount equal to 
the sum of the following amounts in order to fund the costs of the electricity 
system provided for in Article 13 of the Law on the Electricity Sector: 
(a) The estimated annual revenue obtained from the taxes and levies included in 
this Law. 
PROMOCIONES OLIVA PARK 
 
5 
(b) The estimated proceeds from auctioning greenhouse gas emission 
allowances, up to a maximum amount of EUR 500 million.’ 
Brief summary of the facts and the main proceedings 
2 The appellant challenged the order for payment of IVPEE contained in an 
administrative decision dated 28 September 2017, arguing that the law governing 
the tax in question is in breach of EU law on the subject. 
3 Responding to the claim, the Abogada del Estado (Counsel for the Government) 
opposed the appeal. 
4 By order dated 6 February 2019, the referring court allowed the parties and the 
Ministerio Fiscal (State Counsel’s Office) a period of time in which to submit 
arguments on whether the IVPEE established in Law 15/2012 was in breach of 
Article 1(1)(a) of Directive 2003/96/EC, which prohibits the creation of indirect 
taxes on energy products (including electricity) other than for a specific purpose; 
Article 1(2) of Directive 2008/118/EC, which lays down general arrangements in 
relation to excise duty which is levied directly or indirectly on the consumption of 
certain goods, including electricity; Article 1, Article 3(1) and (2) and 
Article 3(3)(a) as read with Article 2(k) of Directive 2009/28/EC, which is 
intended to establish a common framework for the promotion of energy from 
renewable sources; and Directive 2009/72/EC, which governs third-party access to 
the electricity system (Articles 32 to 34). 
Main arguments of the parties to the main proceedings 
5 The arguments concerning the point at issue submitted in response to the aforesaid 
order are set out, in essence, below. 
6 The submission from the State Counsel’s Office was in favour of requesting a 
preliminary ruling on the issues raised. 
7 The appellant, PROMOCIONES OLIVA PARK, also agreed with the question put 
by the referring court, arguing that it was appropriate to refer the matters to the 
CJEU for a preliminary ruling. In its appeal, that company maintained that the 
IVPEE established in Law 15/2012 was incompatible with EU law, arguing that it 
was in breach of Directives 2008/118/EC and 2003/96/EC on the grounds that the 
tax overlapped with other existing taxes on the same goods or service, that it was 
actually an indirect, revenue-raising tax on the production of electricity from 
renewable sources, and that it discriminated against such production as compared 
with the production of energy from other, non-renewable, sources, without taking 
account of intensity and environmental impact. It also argued that the IVPEE had 
no non-fiscal purpose and that it was contrary to the free market and freedom to 
conduct business. It sought the annulment of the decisions it had challenged and 
repayment of the sums claimed. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-220/19 
 
6  
8 Counsel for the Government sought to have the appeal dismissed, and opposed a 
reference for a preliminary ruling on any of the issues of interpretation of EU law 
raised in connection with the IVPEE, arguing that: (a) The Tribunal Supremo 
(Supreme Court, Spain) (order dated 10 January 2018) has already held that the 
IVPEE was not incompatible with EU law. Moreover, in that order the Supreme 
Court had also declined to refer the matter for a preliminary ruling on the grounds 
that, according to Counsel for the Government, the IVPEE is a direct tax on the 
production of electricity and its incorporation into the electricity system, it is not 
passed on to the consumer, it has a specific environmental purpose, it is not 
affected by the ‘polluter pays’ principle, it does not discriminate against 
renewable producers because they can recover the cost of the IVPEE, and it does 
not infringe EU law. (b) The IVPEE is a direct impersonal tax and in no way an 
indirect tax; it is a tax on the business of electricity production, to which European 
directives on indirect taxes or excise duty do not apply. (c) It is not a tax on 
consumption and does not stipulate that the cost is to be passed on to the 
consumer. (d) The objective of the IVPEE is environmental and the tax is to be 
used for a specific purpose; therefore it is not purely a revenue-raising measure. 
(e) The purpose of the tax is to promote renewable energies and it does not 
discriminate in any way against energy from renewable sources. 
Brief summary of the basis for the request for a preliminary ruling 
9 The referring court is putting these questions of interpretation to the CJEU for 
various reasons. The questions address four basic criticisms of the IVPEE, namely 
that: 
(a) although the legislation treats it as a direct tax, its nature and essential 
components are those of an indirect tax; 
(b) while it nominally has an environmental purpose, it is essentially a tax with 
no specific purpose that is designed to raise revenue and has no non-fiscal 
objective; 
(c) it discriminates against the production of electricity from renewable sources; 
and 
(d) it distorts the internal market in energy and is in breach of free competition. 
10 The Government adopted Royal Decree-Law 15/2018 of 5 October 2018 which 
establishes a transitional exemption from the application of the IVPEE with the 
stated aim of reducing consumers’ electricity bills. This gives the referring court 
reason to believe that we are dealing with an indirect tax on electricity rather than 
a direct tax. If this were to be confirmed, it would necessarily mean that the tax 
had to be annulled on the grounds that it was incompatible with EU law on excise 
duty, which prevents national legislatures from taxing goods on which excise duty 
is already payable, unless the tax is for specific purposes. 
PROMOCIONES OLIVA PARK 
 
7 
11 The IVPEE was established by Law 15/2012, under which, at least nominally or 
formally, it was configured as a direct tax whose aim, as stated in the preamble to 
the Law, was to ‘internalise the environmental costs of electricity production’. 
However, under EU law, a tax is to be classified as direct or indirect on the basis 
of an autonomous concept of EU law which, according to the case-law of the 
Court of Justice (judgments of 28 November 2017, Case C-514/16, paragraph 31; 
of 30 May 2018, Case C-390/17, paragraph 17; and of 4 June 2015, Case C-5/14, 
paragraphs 64 and 65), must be construed using categories established in EU law, 
based on the objective nature of the tax and taking into account its true nature, 
irrespective of how it is classified under national law. On this point, we cite the 
judgments of the Court of Justice of 24 June 2010 (C-338/08 and C-339/08), 
paragraph 25, and of 18 January 2017 (C-189/15), paragraph 29. Therefore, in the 
view of the referring court, having regard to the true nature of the IVPEE, it is an 
indirect tax that has no specific purpose and is solely intended to raise revenue. 
12 According to the case-law of the CJEU, in determining whether a tax is an indirect 
tax, one of the most important factors is whether the financial burden of the tax 
can actually be passed on financially to third parties (consumers), even if formally 
it is not passed on. Viewed in this light, and despite what the law states, the 
IVPEE should be classed as an indirect tax for the following reasons: (1) It does 
not take account of any of the particular circumstances of the taxpayer whose 
activities are taxed, and it taxes those activities irrespective of the source of 
production, taxing all producers alike, regardless of the intensity with which they 
use the transport and distribution networks. (2) Its taxable base is not net revenue, 
which is usually the case with direct taxes, but rather gross revenue received for 
the production of electricity and its incorporation into the electricity system; the 
amount of this revenue is therefore not reduced by the costs incurred in these 
activities. (3) As is typically the case with indirect taxes, there is a single tax rate 
(7%), and there is no progressivity of the kind found in direct taxes. There is also 
an impact on the principle of equal treatment, under which different situations 
must not be treated in the same way unless such treatment is objectively justified 
(judgment of 18 January 2012, Djebel — SGPS v Commission, T-422/07, 
paragraph 202). Thus, under the principle of environmental progressivity, those 
who pollute most should be required to pay most. (4) There is no provision for 
exemptions or reductions to take account of the behaviour of the taxpayer, 
regardless of the use which the taxpayer makes of the electricity network and its 
environmental impact. There are no tax incentives for generating electricity from 
renewable sources or with less environmental impact. The system therefore 
discriminates positively in favour of those who generate electricity from non-
renewable sources that are far more harmful to the environment. (5) The tax is 
collected by the Dependencia de Aduanas e Impuestos Especiales de la Agencia 
Tributaria (Customs and Excise Department of the Tax Agency). This 
demonstrates that the tax is an indirect tax, as excise duty is by definition indirect. 
Even if there is no formal mechanism for passing on the tax, the fact is that the 
way in which it applies means that the tax burden is passed on to the consumer 
through the price. (6) Payment arrangements for electricity generation facilities 
that use renewable energy, which were approved by the relevant Ministry, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-220/19 
 
8  
expressly include this tax as an operating cost to be met by consumers. In the view 
of the referring court, all of these factors lead to the conclusion that the IVPEE has 
the characteristics of a tax on consumption, since its essential components are 
unquestionably connected with consumption, in that it is levied on electricity that 
is produced and incorporated into the electricity system for use by economic 
actors other than the producer. 
13 The IVPEE is also in breach of EU law because it does not have a specific 
purpose. The preamble to Law 15/2012 states that the purpose of the IVPEE is to 
ensure that the Spanish tax system recognises more efficient and environmentally 
friendly usage, but it is not possible to identify a specific or non-fiscal reason for 
introducing the tax, since the revenue is not intended to be used for specific 
environmental activities but to reduce the ‘tariff deficit’ which, according to the 
Supreme Court judgment of 18 November 2013, is essentially the difference 
between the regulated tariffs set by the Government that consumers pay for their 
electricity supply and the actual costs involved. Moreover, the configuration of the 
taxable event has nothing to do with the environmental objective, and there is no 
differentiation to take account of the environmental impact of the technology 
used. The true nature of the IVPEE is revealed in the preamble to the Law: to 
address the ‘very high costs of ensuring continuity of supply’. It is clear from the 
Second Additional Provision of the Law that the proceeds of the tax will not be 
used for environmental purposes but to finance the costs of the electricity system 
provided for in the legislation on the electricity sector. This is proof that the 
intention of the legislature was to raise revenue and has absolutely nothing to do 
with environmental protection and promoting renewable energies. 
14 With regard to national case-law, the referring court notes that in an order dated 
14 June 2016 (appeal No 2554/2014) the Supreme Court found that ‘taxes have a 
non-fiscal purpose where their objective is either to discourage or disincentivise 
activities that are considered harmful (to the environment, for example) or, in a 
positive sense, to promote activities that further a particular aim’. According to 
judgment 289/2000 of the Tribunal Constitucional (Constitutional Court), the 
difference between a fiscal tax and a non-fiscal tax intended to protect the 
environment is that the purpose of the former is to finance public expenditure and 
the way in which it is structured principally reflects economic capacity or ability 
to pay, whereas the latter also seeks to change behaviour, or at least to make 
people pay for their behaviour, and its structure must provide the means to achieve 
the desired objective. 
15 The Supreme Court has also acknowledged in various rulings that the IVPEE is a 
revenue-raising rather than a non-fiscal measure, in that it has held that none of 
the IVPEE’s structural components reflects the tax’s purported environmental 
objective, because it taxes those who make intensive use of the systems in the 
same way as those who make little use of them (proportionally, with no form of 
progressivity) (order dated 19 January 2018 in appeal No 2554/2014). The 
Supreme Court order of 14 June 2016 (appeal No 2554/2014) adopts a similar 
position, stating that ‘the IVPEE does not pursue the non-fiscal objective that it 
PROMOCIONES OLIVA PARK 
 
9 
espouses, because it has not been designed as a means of regulating, protecting, 
improving and restoring the environment, but simply as a means of reducing the 
tariff deficit that existed in the electricity sector when Law 15/2012 was passed’. 
The Constitutional Court adopts a similar view when it postulates an objective 
rather than a formal concept of non-fiscal measures in judgments 289/2000, 
179/2006, 60/2013 and 53/2014. 
16 To summarise, in the view of the referring court, the alleged environmental 
purpose of the IVPEE is not reflected in its structure, nor is it a useful tool in 
changing businesses’ polluting behaviour. A mere formal statement that it is an 
environmental measure or a general allocation of the revenue to environmental 
improvements is not enough. In this regard, the CJEU has repeatedly rejected the 
notion that seeking to balance the budget constitutes a specific purpose (see, for 
example, Case C-401/03). 
17 The referring court also cites the judgments of the Court of Justice of 27 February 
2014 (Case C-82/12, Transportes Jordi Besora) and of 25 July 2018 (C-103/17) 
as support for the view that a national indirect tax on goods already subject to 
excise duty must genuinely be allocated to ensuring the specific purposes invoked, 
such as health or environmental protection. The referring court therefore considers 
that the IVPEE is an indirect tax that is a significant tax on consumption, with no 
non-fiscal purpose. In its view, this means that the IVPEE does not meet the 
requirement to have a specific purpose. 
18 The referring court also notes that the IVPEE may not be compliant with 
Article 1(2) of Directive 2009/28/EC, which stipulates that by 2020 Member 
States must meet certain mandatory national targets for the overall share of energy 
from renewable sources in gross final consumption of energy. However, the 
IVPEE’s real purpose is to ensure that responsibility for financing the tariff deficit 
falls particularly on certain electricity producers, because it does not take account 
of the production process and technology used. As a result, it may be distorting 
free competition in the sector. In the view of the referring court, the introduction 
of the IVPEE discourages the generation of electricity from renewable sources 
because the tax is not proportional to the costs, in that it is calculated as a fixed 
percentage of gross revenue, and there is no doubt that it affects the industry that 
is afforded protection under the EU legislation. The referring court also considers 
that the ‘polluter pays’ principle in Article 191(2) TFEU, as read with Articles 20 
and 21 of the Charter of Fundamental Rights (which establish the principles of 
equality and non-discrimination), precludes the introduction of a tax that gives the 
same fiscal treatment to all electricity generation companies, whether or not they 
use renewable energy sources, without taking account of their impact on the 
natural world, and where the main purpose of the tax is not environmental but to 
improve the finances of the electricity system. In short, despite being classed as an 
environmental tax, the IVPEE is discriminatory and breaches the EU scheme for 
promoting renewable energies established in Directive 2009/28/EC. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-220/19 
 
10  
19 Finally, the regulations governing the IVPEE amount to positive discrimination in 
favour of non-national electricity producers because, under Articles 2(1), 4(1) and 
6(1) of Law 15/2012, the IVPEE applies to the production of electricity and the 
incorporation into the system of electricity produced in the Spanish market. In 
contrast, the tax is not levied on imported electricity because this is prohibited 
under Article 110 TFEU, as it would constitute a distortion of free competition, 
which is prohibited by Article 107(1) TFEU. Providing an anticompetitive 
advantage to non-national producers, who are not subject to the IVPEE, distorts 
the free circulation of goods, freedom of establishment and freedom to provide 
services under Directive 2009/72/EC, which legislates for third-party access to the 
system in an objective and non-discriminatory way (Articles 32 to 34). The 
legislation governing the IVPEE therefore allows positive discrimination in favour 
of non-national electricity producers, to the detriment of Spanish producers, 
thereby distorting the internal market for electricity and access to the electricity 
system. 
20 Turning to the relevance of the questions referred, the referring court 
acknowledges that the Supreme Court made an order on 10 January 2018 (appeal 
No 2554/2014) in which it referred a question of unconstitutionality to the 
Constitutional Court and stated that it was convinced that ‘as far as the IVPEE is 
concerned, Law 15/2012 does not present any problems of compatibility with EU 
law’. However, the referring court considers that in that order the Supreme Court: 
(a) did not justify its conviction or give reasons for its decision; (b) by contrast, in 
its order of 14 June 2016, in the same appeal proceedings, No 2554/2014, the 
Supreme Court itself clearly called into question the environmental purpose of the 
IVPEE; and (c) there is no impediment in legislation or in case-law to prevent the 
Supreme Court from referring the matter to the CJEU if it has questions 
concerning the interpretation of the legislation governing the IVPEE in the light of 
particular provisions of EU law. 
21 For all these reasons, the referring court concludes that in order to give judgment 
it needs to request a preliminary ruling, so that the CJEU can provide it with the 
interpretation of those elements of EU law that it needs in order to reach a 
decision in these proceedings.