OPINION OF ADVOCATE GENERAL

WAHL

delivered on 24 October 2013 ( 1 )

Case C‑82/12

Transportes Jordi Besora, S.L.

v

Tribunal Económico Administrativo Regional de Cataluña (TEARC)

Generalitat de Catalunya

(Request for a preliminary ruling from the Tribunal Superior de Justicia de Cataluña (Sala de lo Contencioso Administrativo) (Spain))

‛Directive 92/12/EEC — Excise duties — Mineral oils — Article 3(2) — Specific purpose — Compliance with the general scheme of excise duty or VAT — National tax imposed on the retail sale of certain hydrocarbons — Limitation of the temporal effects of a judgment’

1. This case turns on the proper construction of Article 3(2) of Directive 92/12/EEC (‘the Excise Duty Directive’). ( 2 ) That provision recognises the right of Member States to introduce or maintain indirect taxes on products that are already subject to harmonised rules regarding excise duty. That right is, however, subject to two conditions: (i) that the tax at issue pursues a specific purpose and (ii) that it complies with the rules applicable to excise duty or ( 3 ) VAT as far as determination of the tax base, calculation of the tax, chargeability and monitoring of the tax are concerned.

2. By its request for a preliminary ruling, the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia) (Spain) seeks guidance on whether a specific indirect tax on retail sales of certain hydrocarbons (Impuesto sobre las Ventas Minoristas de Determinados Hidrocarburos) (‘the IVMDH’), which is levied on the consumption of those products, complies with Article 3(2) of the Excise Duty Directive. More specifically, the referring court seeks clarification on two issues: what constitutes a ‘specific purpose’ within the meaning of that provision and what are the requirements for an indirect tax to be considered compliant with the general scheme of tax rules regarding excise duty or VAT. Given the financial consequences involved, the case also raises the question of whether the effects of a possible finding of incompatibility ought to be limited in time.

3. In the following, I will explain why I do not believe that the IVMDH complies with Article 3(2) of the Excise Duty Directive. I will also set out the reasons why I do not think that it is appropriate to limit the effects of a finding of incompatibility in the circumstances of the present case.

I – Legal framework

A – EU law

4. In accordance with Article 1(1), the purpose of the Excise Duty Directive is to lay down ‘the arrangements for products subject to excise duties and other indirect taxes which are levied directly or indirectly on the consumption of such products, except for value added tax and taxes established by the [European Union]’.

5. Under Article 3(1), the directive applies, inter alia, to mineral oils. Article 3(2) of the directive states: ‘The products listed in paragraph 1 may be subject to other indirect taxes for specific purposes, provided that those taxes comply with the tax rules applicable for excise duty and VAT purposes as far as determination of the tax base, calculation of the tax, chargeability and monitoring of the tax are concerned.’

6. Article 6(1) of the directive reads: ‘Excise duty shall become chargeable at the time of release for consumption or when shortages are recorded which must be subject to excise duty in accordance with Article 14(3). Release for consumption of products subject to excise duty shall mean: (a) any departure … from a suspension arrangement; (b) any manufacture … of those products outside a suspension arrangement; (c) any importation of those products … where those products have not been placed under a suspension arrangement.’

B – Spanish law

7. The IVMDH was introduced in Spain by State Law No 24/2001. ( 4 ) Article 9 thereof states: ‘With effect from 1 January 2002, a new tax shall be introduced on retail sales of certain hydrocarbons, to be governed by the following provisions: 1. Nature (1) The tax on retail sales of certain hydrocarbons is an indirect tax levied upon the consumption of those products, being charged at a single stage on retail sales of the products within its material scope ... ... (3) The revenue from the present tax shall be allocated in its entirety to the financing of expenditure on health matters, in accordance with objective criteria laid down at national level. Notwithstanding the foregoing, that part of the revenue which derives from the tax rates set by the Autonomous Communities may be allocated to the financing of environmental measures, which shall also be subject to the same objective criteria. ... 3. Material scope (1) The following hydrocarbons shall be within the material scope of this tax: petrol, diesel fuel, fuel oil and paraffin not used as heating fuel … … 5. Chargeable event (1) Retail sales of the products within its material scope shall be subject to the tax. Transactions whereby taxable persons acquire the taxable products for personal consumption shall also be subject to the tax. … 7. Taxable persons The owners of taxable products who carry out chargeable transactions in respect thereof shall be taxable persons. … 8. Chargeability (1) The tax shall become chargeable when the products within its material scope are made available to purchasers or, as the case may be, at the time of personal consumption, provided that the suspension arrangements … on excise duties have been discharged. … 9. Tax base (1) The tax base shall comprise the volume of the products subject to the tax, expressed in thousands of litres... … 10. Rates (1) The rate of tax applicable to each taxable product shall result from adding the tax rates of the State and the Autonomous Communities. … (3) The Autonomous-Community rate shall be that which is approved by the Autonomous Community concerned, in accordance with the requirements laid down in the [Law regulating the fiscal and administrative measures for the new system of financing of Autonomous Communities and Cities]. If an Autonomous Community has not approved any rate, only the rate as determined by the State shall be applicable ...’

II – Facts, procedure and the questions referred

8. Transportes Jordi Besora, S.L. (‘TJB’) is a haulage company established in the Autonomous Community of Catalonia. To operate its vehicles, TJB purchases large quantities of fuel. Between 2005 and 2008, those purchases were subject to the IVMDH and a total amount of EUR 45 632.38 was passed on to TJB.

9. On 30 November 2009, TJB requested the Oficina Gestora de Impuestos Especiales (the Management Office for Excise Duties) to reimburse the IVMDH paid between 2005 and 2008, because it considered the IVMDH to be contrary to Article 3(2) of the Excise Duty Directive. However, TJB’s request was rejected by decision of 1 December 2009.

10. TJB challenged that decision before the Tribunal Económico Administrativo Regional de Cataluña (the Regional Economic Administrative Court of Catalonia) (‘the TEARC’). The action was dismissed by decision of 10 June 2010.

11. TJB subsequently brought an appeal against that judgment before the referring court, which now seeks a preliminary ruling on the following questions: ‘(1) Is it the case that Article 3(2) of [the Excise Duty Directive] and, in particular, the requirement of a “specific purpose” for a particular tax (a) must be interpreted as requiring that the purpose pursued is not capable of being achieved by means of another harmonised tax? (b) must be interpreted as meaning that there is a purely budgetary purpose when a particular tax has been established simultaneously with the transfer of certain competences to certain Autonomous Communities to which, in turn, are transferred the revenue from the tax with the aim of covering, in part, the costs associated with the competences transferred, it being permissible to lay down rates of tax that vary between Autonomous Communities? (c) If the previous question is answered in the negative, must the term “specific purpose” be interpreted as meaning that the purpose must be exclusive or, on the contrary, that it permits the attainment of various differentiated aims, among which is also included the merely budgetary aim of obtaining financing for certain competences? (d) If the answer to the previous question is that the attainment of various aims is permitted, what degree of relevance must be displayed by a particular objective, for the purposes of Article 3(2) of [the Excise Duty Directive], in order to fulfil the requirement that the tax should meet a “specific purpose” in the sense accepted by the case-law of the [Court] and what would be the criteria for defining the principal purpose as compared with the ancillary purpose? (2) Does Article 3(2) of [the Excise Duty Directive] and, in particular, the condition of complying with the tax rules applicable to excise duties or VAT for the determination of chargeability, (a) preclude an indirect non-harmonised tax (such as the IVMDH) which becomes chargeable at the time of the retail sale of the fuel to the final consumer, in contrast to the harmonised tax (“Impuesto sobre Hidrocarburos”, ( 5 ) which becomes chargeable when the products leave the last tax warehouse) or VAT (which, although also becoming chargeable at the time of the final retail sale, is payable at each stage of the production and distribution process), on the basis that it does not – to use the terms of the judgment in [EKW and Wein & Co, paragraph 47] – accord with the general scheme of one or other of the abovementioned taxation techniques as structured by [EU] legislation? (b) In the event that the foregoing question is answered in the negative, must the interpretation be that the said compliance condition is fulfilled, without the need for any coinciding of the effects of the chargeability, on account of the mere circumstance that the non-harmonised indirect tax (in this case, the IVMDH) does not disrupt – in the sense that it does not impede or render difficult – the normal functioning of the chargeability of excise duties or VAT?’

12. Written observations have been submitted by TJB, the Generalitat de Catalunya, the Spanish, Greek and Portuguese Governments as well as by the Commission. At the hearing on 26 June 2013 oral argument was presented by TJB, the Generalitat de Catalunya, the Spanish and French Governments, and by the Commission.

III – Analysis

A – Preliminary issues

13. The referring court has divided its two questions into a number of limbs. However, I read those questions as essentially seeking to establish whether Article 3(2) of the Excise Duty Directive precludes an indirect tax such as the IVMDH in the present case.

14. Given that compliance with Article 3(2) of the Excise Duty Directive requires that both the conditions alluded to in point 1 above (namely (i) that the tax pursues a ‘specific purpose’ and (ii) that it complies with the general scheme of excise duty or VAT) are met, I will address each of those conditions in turn. However, before turning to the issue of what constitutes a specific purpose, I will briefly comment on the nature of Article 3(2) of the Excise Duty Directive within the system set up by that directive.

15. It is necessary to bear in mind that the original Commission proposal for an Excise Duty Directive stated that the products covered by the directive would ‘… not be subject to any tax other than excise duty and value added tax’. ( 6 ) However, the Council insisted that Member States retain a residual power of taxation. This was justified by divergent approaches to excise duties and the role of indirect taxes in implementing non-budgetary policies in Member States. The insertion of Article 3(2) in the Excise Duty Directive reflects the position taken by the Council on what it considered to be the appropriate level of harmonisation in this field. ( 7 )

16. Moreover, when interpreting Article 3(2) of the Excise Duty Directive, it should be borne in mind that that provision constitutes an exception to the general system of harmonised excise duties. Accordingly, it must be construed strictly. ( 8 )

B – First condition: existence of a non-budgetary ‘specific purpose’

17. The case-law of the Court, and in particular its judgment in EKW and Wein & Co, contains elements from which an answer to the question posed by the referring court can be inferred.

18. With regard to the issue of what constitutes a ‘specific purpose’ within the meaning of Article 3(2) of the Excise Duty Directive, the Court has held that it is to be understood as a purpose other than ‘a purely budgetary one’. ( 9 ) It has also confirmed that the reinforcement of municipal autonomy through the grant of a power to generate tax income in itself constitutes a purely budgetary purpose so that such a purpose cannot fall under the derogation in Article 3(2) of the Excise Duty Directive. ( 10 ) It is important to note, therefore, that in order to comply with that provision, the indirect tax in question should not only serve a budgetary purpose.

19. In this regard, it emerges from the documents before the Court that the IVMDH was introduced at the same time as certain competences in the health sector were transferred to the Autonomous Communities. It is accepted that the aim of the IVMDH was to cover in part the costs incurred as a result of the transfer of those competences. Confirming this point in its written observations, the Generalitat de Catalunya admits that the aim of the creation of the IVMDH was to ensure that the Autonomous Communities possessed sufficient resources to meet the health-related costs which they took on as a result of the transfer of competences in the health sector. At the hearing, it was further explained that revenues generated from the IVMDH have been used, inter alia, to build new hospitals.

20. Against this background the following question arises: Can an indirect tax, which serves (at least in part) a budgetary purpose in that it finances the transferred competences in the health sector, nonetheless be regarded as being within the scope of Article 3(2) of the Excise Duty Directive?

21. While it is for the referring court to make findings of fact and apply the interpretative framework provided by the Court to the facts of the case before it, I must confess to having difficulty in accepting that an indirect tax such as the IVMDH could serve a ‘specific purpose’ within the meaning of Article 3(2) of the Excise Duty Directive. In fact, according to the referring court, the IVMDH pursues the same objective as the harmonised excise duty (the IH), namely that of reducing the social (health and environmental) costs incurred as a result of the consumption of hydrocarbons.

22. Admittedly, it cannot be ruled out that a tax which – in addition to serving a budgetary purpose – is specifically intended to protect public health or the environment may pursue a ‘specific purpose’ within the meaning of Article 3(2). ( 11 ) However, in my view, the fact that the objectives of the laws establishing the IVMDH and the IH coincide excludes at the outset the possibility of relying on Article 3(2) of the Excise Duty Directive. In fact, because of this overlap, the IVMDH cannot be construed as serving a specific purpose within the meaning of Article 3(2) of the Excise Duty Directive. ( 12 ) Such a construction would quite simply compromise efforts to harmonise the excise duty regime and give rise to an additional excise duty, contrary to the very purpose of the Excise Duty Directive to abolish remaining barriers in the internal market. Indeed, despite the broadly stated objective concerning the protection of public health and the environment, both instruments seem to serve, in the final analysis, the same budgetary purpose of meeting general demands of public expenditure in a specific field. ( 13 )

23. Additionally – even supposing that an overlap of the objectives described above does not exist – I believe there to be two criteria which may be deployed to determine whether or not an indirect tax, such as the IVMDH in the present case, pursues a ‘specific purpose’ within the meaning of Article 3(2) of the Excise Duty Directive. These are: (i) the structure of the tax itself (and, more specifically, its calculation) or (ii) the use of the revenue from the tax to further the achievement of a specific (non-budgetary) purpose. ( 14 ) I consider the latter (ii) to be secondary to (i) and to come into play only if it cannot be determined on the basis of the first criterion whether the tax in question pursues a specific purpose.

24. Firstly, the structure of an indirect tax may constitute a particularly useful indication of the non-budgetary purpose of a tax. In fact, it seems to me that ‘structure’ offers the primary tool for identifying a ‘specific purpose’. This is so, because a tax rarely escapes the constraints of a budgetary purpose, unless its structure attests to the existence of another, non-budgetary, aim.

25. More specifically, a non-budgetary purpose can be identified where a tax is set at a level which discourages or encourages certain behaviour. This is so, in particular, where the level of the tax varies according to the adverse health or environmental effects of the taxed product. ( 15 ) An important point to note is that, to the extent that the structure of the tax shows that it serves a specific purpose, the revenue collected may be put to any use deemed appropriate. In this respect – and notwithstanding the fact that the purported aim of the IVMDH is to reduce the adverse effects of the consumption of hydrocarbons – I note that the Court has not been provided with information suggesting that the structure of the IVMDH is in fact designed specifically to discourage the consumption of hydrocarbons or, indeed, to encourage the use of some other type of product deemed less harmful from a public health or environmental point of view. ( 16 )

26. Secondly, even if the structure does not point to the existence of a genuine ‘specific purpose’, the tax in question may nonetheless be regarded as within the derogation in Article 3(2) of the Excise Duty Directive. This is so where the revenue obtained is used to finance specific measures, which contribute directly to the achievement of a specific non-budgetary purpose (pertaining, for example, to the protection of public health or the environment). Under this second subsidiary hypothesis, I believe it is of particular importance – in order to respect the fact that Article 3(2) constitutes an exception to the general rule – that a sufficiently close link be established between how the revenue obtained is used, on the one hand, and the achievement of the specific (non-budgetary) purpose of the tax, on the other.

27. In accordance with Article 9(1)(3) of Law No 24/2001, the revenue obtained through the IVMDH is to be used for health and environmental measures (although financing environmental measures appears to be optional). It is thus undoubtedly assigned to a predetermined purpose. However, that purpose remains in my view purely budgetary. In the present circumstances, the use of the revenues is defined very broadly: measures financed by the IVMDH are by no means limited to those that could be argued to possess an intimate link to the aim of combatting the harmful effects of the use of the taxed products.

28. It is important to draw a distinction between the purpose of the tax – which constitutes the heart of the issue under consideration – and the possible uses to which the revenue therefrom is put. By contrast with the scenario arising in connection with the criterion of ‘structure’ mentioned in point 24 above (where the funds obtained may be used as deemed appropriate), the issue of how the revenue collected is used is of particular significance here. This is because, to establish a link between the use of the revenue and the specific purpose of the tax in question, it is imperative that the use to which the funds are put should contribute to the attainment of the non-budgetary purpose of the tax in question (here: the reduction of the social costs related to the consumption of hydrocarbons).

29. Simply put, accepting that compliance with Article 3(2) of the Excise Duty Directive would merely require that the tax revenue is assigned to a predetermined purpose (or, as the case may be, predetermined purposes as is the case here) would quite simply deprive the directive of its effectiveness. Indeed, such an interpretation would open the derogation to any purpose(s), budgetary or other, provided that the tax revenue at issue was allocated in a specific manner to offset certain costs borne by public authorities. Moreover, it would allow Member States to rely on several concurrent predetermined purposes to justify the need to introduce other indirect taxes on products governed by the directive.

30. In my view, the mere allocation of tax revenue to health and environmental measures in general does not suffice to prove that the tax pursues a non-budgetary purpose as required by Article 3(2) of the Excise Duty Directive. In the present case, no direct link has been established between, on the one hand, the measures financed with the revenue obtained from the IVMDH, and the aim of obviating and rectifying the adverse impact associated with the consumption of hydrocarbons, on the other.

31. In fact, there is nothing in the documents before the Court to suggest that the revenues collected through the IVMDH must be allocated to specific health or environmental measures which could in turn confirm the existence of a non-budgetary purpose. As has been mentioned above, the revenue obtained from the IVMDH has been used to cover expenses (of a general nature) linked, in particular, to health care, a competence which was transferred to the Autonomous Communities in tandem with the introduction of the IVMDH. To fall under the derogation in Article 3(2) of the Excise Duty Directive, national rules ought to specify, at the very least, how the revenue collected is to be allocated (to further the non-budgetary aim of the tax). In addition, where differentiated levels of taxation are adopted, the rules setting those levels ought also to contain objective criteria on which such differentiation can be based.

32. In light of the above, I do not believe that an indirect tax such as the IVMDH can be regarded as serving a ‘specific purpose’ within the meaning of Article 3(2) of the Excise Duty Directive. Given that result, it is not necessary to consider the second condition (compliance with the general scheme of excise duty or VAT). Should the Court nonetheless wish to do so, I will make the following observations.

C – Second condition: compliance with the general scheme of excise duty or VAT

33. At the outset, I would recall that, for the purposes of Article 3(2) of the Excise Duty Directive, it is sufficient, as the referring court points out, that an indirect tax, which pursues a specific purpose, complies with the tax rules applicable for excise duty or VAT purposes as far as (i) determination of the tax base, (ii) calculation of the tax, (iii) chargeability and (iv) monitoring of the tax are concerned. ( 17 ) The referring court is unsure whether this is the case so far as the IVMDH is concerned.

34. The issue of chargeability lies at the heart of the referring court’s uncertainty with regard to the second condition. ( 18 ) On this point, the Court stated in EKW and Wein & Co that the duty at issue in those proceedings did not ‘comply with the rules governing chargeability of excise duty, since it is chargeable only at the stage of sale to the consumer, and not at the time of release for consumption’(emphasis added). ( 19 )

35. That conclusion is directly transposable to the present case.

36. In fact, under Article 6(1) of the Excise Duty Directive, excise duty is to become chargeable ‘at the time of release for consumption’. ( 20 ) That is when the product leaves the last tax warehouse. By contrast with that provision, the file shows that the IVMDH is levied in connection with the retail sale of such products (which occurs after ‘release for consumption’ within the meaning of the Excise Duty Directive).

37. Admittedly, however, the Court’s case-law makes it clear that compliance with ‘the general scheme’ of excise duties (or VAT) does not require that the indirect tax at issue complies with all rules applicable to excise duty as far as the tax base, calculation of the tax, and chargeability and monitoring of the tax are concerned. Instead, it requires that the indirect tax complies on those four points with the general scheme of either excise duties or VAT as outlined by EU legislation. ( 21 ) Indeed, as Advocate General Saggio has pointed out, if the two regimes were required to be exactly the same, that would not only deprive Article 3(2) of any practical effect but might also give rise to another form of excise duty, contrary to the principle of the uniform character of the excise duty regime. ( 22 )

38. Following that line of reasoning, it seems that if a Member State wishes to introduce an indirect tax, with a specific purpose linked to the protection of public health (and the environment), on certain types of mineral oils, it may do so only in so far as that tax complies with all the EU rules relating to the relevant category of products with regard to either excise duty or VAT, but it would not also have to comply to the letter with specific rules – assuming that such rules in fact existed – relating to a particular sub-category of such products. ( 23 )

39. The question remains, however, when does a tax comply with the ‘general scheme’ of one of those taxation techniques? And further, may incompatibility be inferred from the fact that the taxes at issue do not become chargeable at the same point in time?

40. In my view, the answer to these questions lies in the rationale underlying the Excise Duty Directive. The Court has held that the directive is intended to prevent additional indirect taxes from improperly obstructing trade. That would, in particular, be the case if traders were subject to formalities other than those provided for by EU legislation on excise duty or VAT. ( 24 ) Where the indirect tax in question interferes with this objective, it cannot be compatible with either one of these taxation systems. The relevant criterion is therefore whether or not the tax interferes with the proper functioning of the market. It is not, as the Generalitat de Catalunya and the Spanish Government argue, whether or not the tax in question interferes with the normal functioning of the system set up by the Excise Duty Directive (or, indeed, the VAT Directive ( 25 )).

41. Indeed, while the Excise Duty Directive does not explicitly distinguish between the four criteria (tax base, calculation of tax, monitoring and chargeability) as to their respective order of importance in determining whether the tax in question complies with the general scheme of either excise duty or VAT, the directive does nonetheless place particular emphasis on chargeability. This is because of its significance for the proper functioning of the internal market. ( 26 )

42. A point that should not be overlooked is that discrepancy in relation to chargeability will have an impact on the length of the suspension arrangement (although the difference in time may be dependent on the nature of the products at issue). Under the Excise Duty Directive, the monitoring of the product ceases once it leaves the tax warehouse. In the present circumstances, the IVMDH nonetheless requires monitoring to continue until the product is sold to the end-user. At the hearing it also became clear that further discrepancies exist between the IVMDH and the system set up by the Excise Duty Directive: this is particularly so with regard to the obligation to declare the tax at issue and the method of calculation of the tax. ( 27 )

43. With regard to VAT, suffice it to note that following the judgment of the Court in EKW and Wein & Co, it is settled law that an indirect tax such as the IVMDH, which is charged only at the stage of sale to the consumer and not, as is the case for VAT, at each stage in the production and distribution process, cannot be held to be compatible with the general scheme of VAT. ( 28 )

44. In short, introducing an additional tax which becomes chargeable at a different point in time than excise duty (which also means that taxable persons may differ with regard to the two taxes) creates additional formalities for traders within the meaning of the Court’s case-law. Consequently, such a tax is precluded by Article 3(2) of the Excise Duty Directive.

45. Lastly, as regards the issue of whether the IVMDH (assuming that it pursues a specific purpose) could, despite the interpretation proposed above, be construed as being consistent with Article 3(2) simply because it does not impede or render difficult the normal functioning of the chargeability of excise duties or VAT, as the referring court seems to suggest in the second part of Question 2, I refer to my observations in point 40 above.

46. In light of all the above considerations, I take the view that Article 3(2) of the Excise Duty Directive precludes an indirect tax such as the IVMDH at issue in the main proceedings, where the national court finds that such a tax does not serve a specific non-budgetary purpose and does not comply with the general scheme of excise duty or VAT as far as determination of chargeability is concerned.

D – Is it appropriate to limit the temporal effects of the Court’s judgment in the present case?

47. The Spanish Government has requested that the Court limit the temporal effects of its judgment in the event that it should find the IVMDH to be incompatible with Article 3(2) of the Excise Duty Directive. Given the approach taken in this Opinion, it is necessary to consider whether such a limitation is justified in the present case. While it is clear from the arguments ( 29 ) put forward by the Spanish Government that the financial consequences of a finding of incompatibility can by no means be underestimated, I do not consider it appropriate to limit the temporal effects of a finding of incompatibility in the present circumstances.

48. At the outset, I would recall that an interpretation given by the Court to a rule of EU law is intended to clarify and define the meaning and scope of that rule as it ought to have been understood and applied from the time of its entry into force. Accordingly, the rule – as interpreted by the Court – is to be applied to all legal relationships, including those which arose and were established before the judgment in which the interpretation was given. ( 30 ) As a matter of principle, the Court may therefore limit the temporal effects of its judgments only in exceptional circumstances. ( 31 )

49. The Court has previously accepted that the temporal effects of a judgment may be limited where two (cumulative) conditions have been met. On the one hand, a ‘risk of serious economic repercussions’ must be established. Those repercussions must stem, in particular, from a large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force. On the other hand, unlawful practices must have been adopted as a result of the existence of objective, significant uncertainty concerning the interpretation and scope of the EU law provisions in question. In this respect, the Court has attached particular importance to the conduct of other Member States and the Commission, which may have contributed to the unlawful behaviour in question. ( 32 )

50. In the present case, the Spanish Government has put forward three arguments to justify limiting the temporal effects of a finding of incompatibility. Firstly, it contends that the retrospective application of such a judgment would entail serious financial consequences for Spain and its Autonomous Communities. This is because the refunds to be granted in the event of a finding of incompatibility would, according to the estimate of the Spanish Government, amount to approximately EUR 13 billion (or 1.25% of the Spanish gross domestic product in 2011). ( 33 ) Secondly, it argues that an obligation to repay the taxes improperly levied would seriously compromise the financing of the public health system in the territory of the Autonomous Communities. Thirdly, the Spanish Government considers that the Commission has contributed to the breach in question by its behaviour.

51. At the hearing, the Commission and TJB called into question, in particular, the estimates made by the Spanish Government with regard to the magnitude of the financial risk involved. In their view, national limitation rules would automatically bar any claims older than four years. Moreover, given the large amount of cases already pending, the Commission also questioned the practical effect of limiting the retrospective application of a finding of incompatibility.

52. Even supposing the objections to be well founded, I have no doubt, as mentioned above, that the sums involved remain considerable. Indeed, taking into account, in particular, the precarious financial situation that Spain and its Autonomous Communities are currently facing, it cannot be ruled out that those sums entail a ‘risk of serious economic repercussions’ within the meaning of the Court’s case-law. ( 34 )

53. Moreover, given the large number of legal relationships involved (even if it does seem likely that refunds will primarily be claimed by businesses such as TJB), it is conceivable that a finding of incompatibility will have serious repercussions on the system which contributes to the financing of the Autonomous Communities. Nor can confusion and disruption of regional funding of health care be ruled out, given the importance of the IVMDH in financing measures adopted by the Autonomous Communities in this field. On the basis of these factors, it appears that the first condition is met in this case.

54. However, the (mere) fact that a preliminary ruling may have significant financial consequences for a Member State, does not, as a rule, suffice to justify limiting the temporal effects of a judgment. ( 35 ) Any other conclusion would have the paradoxical effect of treating the most serious and most longstanding infringements most favourably. ( 36 ) This is why the second condition concerning uncertainty as to the meaning and scope of the relevant EU law provisions must also be fulfilled.

55. There does not seem to be any such uncertainty here. In fact, the present case must be distinguished from EKW and Wein & Co where the Court accepted that the retroactive effect of the judgment should be limited. This was considered justified because, in the first place, Article 3(2) had not previously been the subject of a preliminary ruling and interpretive guidance from the Court. In the second place, the Court considered that the conduct of the Commission could have caused the Austrian Government reasonably to believe that the legislation at issue complied with EU law. ( 37 )

56. By contrast, when the IVMDH was adopted, the Court had already provided guidance on the interpretation of Article 3(2) of the Excise Duty Directive and, most importantly, given a ruling on the incompatibility of a similarly construed duty in EKW and Wein & Co. ( 38 ) Nor am I convinced by the arguments of the Spanish Government to the effect that it had acted in good faith when adopting the IVMDH. In fact, there is nothing in the documents before the Court to suggest that the Commission has misled the Spanish Government in relation to the lawfulness of the IVMDH. On the contrary, it has clearly indicated that it considers the IVMDH to be unlawful.

57. In fact, prior to the introduction of the IVMDH, a number of preliminary questions were put to the Commission as to the compatibility with EU law of certain legal solutions that were being considered. The reply given by the Commission, which is included in the file, does not in my view corroborate the claims of the Spanish Government. Instead of misleading Spain into believing that the projected legislation was in conformity with EU law, it is my understanding that the Commission clearly restated, referring inter alia to the Court’s judgment in EKW and Wein & Co, the conditions which must be fulfilled for an indirect tax to be compatible with EU law. In concluding its assessment, it made clear that it did not consider the draft legislation in question to comply with EU law. The instigation of infringement proceedings against Spain on this issue further confirms the view of the Commission on the unlawfulness of the IVMDH. I therefore do not think it is appropriate to limit the temporal effects of the Court’s judgment in the present case.

58. Having said that, I do not believe that it can be categorically ruled out that, in certain, highly exceptional, circumstances where the financial impact of retroactivity would be particularly serious, the Court could consider limiting the temporal effects of its judgment even where the second condition pertaining to good faith is not fulfilled. This would be so, in particular, where the financial consequences are deemed clearly disproportionate to the degree of negligence involved. I would nonetheless caution against discarding the criterion of good faith in the present circumstances. As noted above, Spain appears to have knowingly taken the risk of going forward with the legislation in question and, as a result, that legislation has been applied for many years to the detriment of the end-user and the internal market.

IV – Conclusion

59. In light of the arguments presented, I propose that the Court answer the questions referred by the Tribunal Superior de Justicia de Cataluña as follows: Article 3(2) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products precludes an indirect tax such as the tax on retail sales of certain hydrocarbons (Impuesto sobre las Ventas Minoristas de Determinados Hidrocarburos) at issue in the main proceedings, where the national court finds that such a tax does not serve a specific non-budgetary purpose and does not comply with the general scheme of excise duty or VAT as far as determination of chargeability is concerned.

( 1 ) Original language: English.

( 2 ) Council Directive of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1), as amended. Directive 92/12 has, as from 1 April 2010, been repealed and replaced by Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC (OJ 2009 L 9, p. 12).

( 3 ) The language of Article 3(2) of the Excise Duty Directive has previously caused confusion. This is because some language versions refer to ‘excise duties and VAT’, whereas others contain the expression ‘excise duties or VAT’. Given that rules on excise duties and VAT are mutually incompatible in many ways and that compliance with both would entail many practical difficulties, the Court has held that it suffices that the tax in question is in line with the general scheme of excise duties or VAT; see Case C-434/97 Commission v France [2000] ECR I-1129, paragraphs 24 and 27, and Case C-437/97 EKW and Wein & Co [2000] ECR I-1157, paragraphs 44 and 47.

( 4 ) Law No 24/2001 of 27 December 2001 on measures of a fiscal, administrative or social nature. BOE No 313 of 31 December 2001 (Ley 24/2001, de 27 de dicíembre, de Medidas Fiscales, Administrativas y del Orden Social).

( 5 ) The Impuesto sobre Hidrocarburos (‘the IH’) is regulated by Law No 38/1992 of 28 December 1992 on Excise Duties (Ley 38/1992, de 28 de dicíembre, de Impuestos Especiales).

( 6 ) Proposal for a Council directive on the general arrangements for products subject to excise duty and on the holding and movement of such products, COM(90) 431 final (OJ 1990 C 322, p. 1), Article 3(2).

( 7 ) See Commission v France, paragraph 18.

( 8 ) Opinion of Advocate General Saggio in EKW and Wein & Co, point 38.

( 9 ) EKW and Wein & Co, paragraph 31. See also Case C-491/03 Hermann [2005] ECR I-2025, paragraph 16, and Commission v France, paragraph 19.

( 10 ) EKW and Wein & Co, paragraph 33.

( 11 ) See Commission v France, and the Opinion of Advocate General Saggio in EKW and Wein & Co, point 39. See also the Opinion Advocate General Fennelly in Case C-346/97 Braathens [1999] ECR I-3419, point 14.

( 12 ) See, similarly, Opinion of Advocate General Ruiz-Jarabo Colomer in Hermann, point 44.

( 13 ) Even though an excise duty, such as the IH, could be regarded as an environmental tax given that the production and use of mineral oils undoubtedly affects the environment, that does not alter the underlying objective to obtain funds to support government functions.

( 14 ) See, similarly, the Opinion of Advocate General Fennelly in Braathens, point 15, and the Opinion of Advocate General Saggio in EKW and Wein & Co, point 40.

( 15 ) See, to that effect, Commission v France, which concerned an indirect tax on alcohol payable on alcoholic beverages with an alcoholic strength greater than 25% by volume. See also the Opinion of Advocate General Fennelly in Braathens, point 15, and the Opinion of Advocate General Ruiz-Jarabo Colomer in Hermann, point 43.

( 16 ) It does, however, emerge from the order for reference that different levels of taxation are applied in a number of Autonomous Communities. Although the deterrent effect certainly may depend on various circumstances (and may even be subject to regional differences), this would seem to suggest that the IVMDH is a purely budgetary instrument to the extent that its structure (in practice, the level of taxation) is not unequivocally set at a level deemed sufficiently high to discourage the use of taxed mineral oils. Moreover, I would call to mind that the introduction and maintenance of differentiated levels of taxation requires authorisation in accordance with Article 19 of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for taxation of energy products and electricity (OJ 2003 L 283, p. 51), which applies to mineral oils.

( 17 ) See point 1 above. See also Commission v France, paragraph 27, and EKW and Wein & Co, paragraphs 44 and 47.

( 18 ) The referring court has not provided the Court with detailed information about the differences in tax base, calculation of the tax and monitoring. At the hearing, TJB provided the Court with information about the differences between the IVMDH and the requirements contained in the Excise Duty Directive, whereas the Spanish Government concluded, after a thorough comparison of the IVMDH against excise duty and VAT in relation to tax base, calculation of the tax, chargeability and monitoring, that the IVMDH does not interfere with either of these tax systems.

( 19 ) EKW and Wein & Co, paragraph 48.

( 20 ) See also Article 4(2) of Directive 2003/96, which provides that ‘[f]or the purpose of this Directive “level of taxation” is the total charge levied in respect of all indirect taxes (except VAT) calculated directly or indirectly on the quantity of energy products and electricity at the time of release for consumption’.

( 21 ) EKW and Wein & Co, paragraph 47.

( 22 ) Opinion of Advocate General Saggio in EKW and Wein & Co, point 46.

( 23 ) Accordingly – and contrary to what the French Government argued at the hearing – I do not believe that it is of relevance for the taxation of mineral oils that Article 21(5) of Directive 2003/96 provides, with regard to electricity and natural gas (which do not form part of mineral oils), that those products are to become chargeable at the time of supply by the distributor or redistributor.

( 24 ) Commission v France, paragraph 26, and EKW and Wein & Co, paragraph 46.

( 25 ) Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).

( 26 ) The fourth recital in the preamble to the Excise Duty Directive specifically highlights the need to ensure that the chargeability of excise duties is identical in all the Member States.

( 27 ) The IH is to be included in a monthly tax return whereas the IVMDH is included in a quarterly tax return. As for the calculation of the tax, excise duty on mineral oils is calculated on the basis of their temperature at 18 degrees, whereas the relevant temperature for the IVMDH is air temperature.

( 28 ) EKW and Wein & Co, paragraph 49. In holding the duty at issue in those proceedings to be incompatible with EU law, the Court also placed emphasis on the fact that, unlike VAT, an indirect tax which becomes chargeable only at the stage of sale to the end-user is calculated without any deduction being made for input tax. While this appears to be the direct consequence of a tax becoming chargeable when the product is sold to the end-user, it must be noted that even on this point the IVMDH obeys the same logic as the duty at issue in EKW and Wein & Co.

( 29 ) See point 50 below.

( 30 ) See, for example, Joined Cases C-338/11 to C-347/11 FIM Santander Top 25 Euro [2012] ECR, paragraph 58 and case-law cited.

( 31 ) Ibid., paragraph 59 and case-law cited. See also, for example, Case C-292/04 Meilicke and Others [2007] ECR I-1835, paragraph 36 and case-law cited.

( 32 ) For example, see FIM Santander Top 25 Euro, paragraph 60 and case-law cited. This also applies in cases regarding taxes collected by competent national authorities; see EKW and Wein & Co, paragraphs 55 to 60.

( 33 ) Although such an additional financial burden would undoubtedly have devastating consequences for any State, the gravity of the consequences involved for a Member State in Spain’s financial situation cannot in my view be underestimated.

( 34 ) Cf. the Opinion of Advocate General Tizzano in Meilicke and Others, points 34 and 35. In that case, the German Government estimated that not limiting the effect of a finding of incompatibility would have amounted to tax refunds corresponding to 0.25% of the German gross domestic product in 2004. It must also be noted that the Court did not follow the Advocate General’s proposal to limit the retroactivity of its judgment in that case.

( 35 ) Case C-209/03 Bidar [2005] ECR I-2119, paragraph 68 and case-law cited.

( 36 ) Opinion of Advocate General Saggio in EKW and Wein Co, point 65.

( 37 ) EKW and Wein & Co, paragraph 58.

( 38 ) See also Commission v France. Here, it must be noted that the ‘specific purpose’ of the French tax at issue was not called into question, merely its compatibility with excise duty or VAT rules. This is in my view because the tax was structured in a manner capable of furthering the non-budgetary purpose put forward by the French authorities.