WRITTEN QUESTION E-2456/01 by Camilo Nogueira Román (Verts/ALE) to the Commission. Statements by the Spanish Finance Minister on the tax raison powers of the Spanish Autonomous communities.
Date: 2001-09-11
Institutions: European Parliament, Provisional data
Subjects: EU law - national law, Spain, fiscal policy, regions of Spain, relations between the State and the regions, tax harmonisation, tax law

29.8.2002

EN

Official Journal of the European Communities

C 205 E/7

(2002/C 205 E/007)

WRITTEN QUESTION E-2456/01

by Camilo Nogueira Román (Verts/ALE) to the Commission

(11 September 2001)

Subject: Statements by the Spanish Finance Minister on the tax raison powers of the Spanish Autonomous

communities

On 27 July 2001, the Spanish central government and the governments of the Autonomous Communities
(AC) signed an agreement on autonomous funding, which renews and amends the agreement covering the
last five years. The new agreement extends the granting of a certain proportion of the tax revenue raised in
each Community to new state taxes. Specifically and principally, the level of income tax of physical
persons rises from 30 % to 33 %, and 35 % of VAT and percentages ranging from 40 % (fuel, tobacco and
alcohol) to 100 % (electricity and restrictions of documents) for special taxes. The Agreement can be
legitimately criticised for objectively privileging and particularly benefiting Spain’s richest Autonomous
Communities, giving them a proportionately larger revenue increase and giving them much greater
financial self-sufficiency, with the richest Communities enjoying double the level of self-sufficiency of the
least developed.

tax on fuel.

In response to this latter criticism, Christóbal Montoro,

The Agreement has also been criticised for preventing the Autonomous Communities from enjoying a
certain degree of tax-raising powers in establishing the base-rate of the newly ceded taxes, particularly VAT
and the special
the Spanish
Government Minister of Finance, has said that the central government cannot grant greater tax-raising
powers to the Autonomous Communities, because that runs counter to European Union law and is
forbidden by the Commission. The Minister’s statements appear to be deliberately unaware of that fact that
according to the Treaties,
it is true that the EU is responsible for upholding competition rules in the
common market, and therefore for preventing situations of tax privilege from arising, but it is no less true
that the Union’s institutions are not responsible 6 contrary to what the Minister claims 6 for deciding
which government bodies, whether those of the central state government or the autonomous governments,
enjoy tax-raising powers, since this is a matter to be decided by each Member State on its own. Could the
Commission throw any light on this major issue, so that
the Spanish Autonomous Communities,
particularly Galicia, which I represent, can operate in accordance with their constitutional autonomy
within the bounds of EU law?

Answer given by Mr Bolkestein on behalf of the Commission

(31 October 2001)

Under the reform of the funding of the Communidades Autonomas (Autonomous Communities), the
Spanish authorities have adopted a number of measures in the field of taxation.

One such measure concerns the transfer to the autonomous communities of part of the revenue from
value-added tax (VAT) and the special tax on fuel. Here, Community rules do not pose any restrictions:
Member States may use and redistribute their tax revenue according to their needs.

Most of the fiscal components of these different taxes are harmonised. A real transfer of regulatory
capacities to the autonomous communities would involve giving them the possibility of laying down laws
changing the tax rate. However, current EU rules on VAT do not allow autonomous communities to fix
different VAT rates. Article 12(3)(a) of the Sixth Directive (1) provides that a single standard rate shall be
fixed by each Member State. Member States can also apply either one or two reduced rates. Moreover,
VAT is subject to the principle of a single rate, namely, that identical goods or services cannot be taxed at
different rates within the same Member State. The only exceptions to these principles are the specific and
transitory derogations approved unanimously by the Council, contained in Article 28 of
the Sixth
Directive (2).

C 205 E/8

Official Journal of the European Communities

EN

29.8.2002

The directives on excise goods and the case-law of the Court of Justice lay down that for each product
subject to a harmonised excise structure at EU level, Member States must apply a single national rate of
taxation which must be higher than the minimum rate stipulated by the directive concerned. The Council
may authorise a Member State to introduce additional exemptions or reductions (3) if they are justified by
social, environment or transport policy considerations.

On a more general note, it should be pointed out that under the case-law of the Court of Justice (4),
Member States are solely responsible, under Community law, for the measures adopted by their territorial
entities. It is therefore for the individual Member States to set up a framework within which legislative
power is exercised in this field, in order to ensure compliance with Community law and, in particular, with
Community rules on state aids.

(1) Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to
turnover taxes 6 Common system of value added tax: uniform basis of assessment 6 OJ L 145, 13.6.1977, as last
amended by Council Directive 2001/4/EC of 19 January 2001, with regard to the length of time during which the
minimum standard rate is to be applied 6 OJ L 22, 24.1.2001, and corrigendum in OJ L 26, 27.1.2001.

(2) Council Directive 92/77/EEC of 19 October 1992 supplementing the common system of value added tax and

amending Directive 77/388/EEC (approximation of VAT rates) 6 OJ L 316, 31.10.1992.

(3) See Article 8(4) of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of
excise duties on mineral oils 6 OJ L 316, 31.10.1992, as last amended by Council Directive 94/74/EEC of
22 December 1994 amending Directive 92/12/EEC on the general arrangements for products subject to excise duty
and on the holding, movement and monitoring of such products, Directive 92/81/EEC on the harmonisation of the
structures of excise duties on mineral oils and Directive 92/82/EEC on the approximation of the rates of excise
duties on mineral oils 6 OJ L 365, 31.12.1994.
Judgment of 14 October 1987, C-248/84, Germany v Commission, ECR page 4013 and judgment of 8 March
1988, joined cases C-62/87 and 72/87, Exécutif régional wallon and SA Glaverbel v Commission, ECR page 1573.

(4)

(2002/C 205 E/008)

WRITTEN QUESTION E-2750/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(9 October 2001)

Subject: Cars confiscated on the border between Finland and Sweden

In 1997 several Swedish citizens had their cars confiscated by the Finnish customs authorities. One of
them was a Swedish citizen whose car was confiscated on the grounds that he had spent more than 185
nights in the year with his Finnish fiancée. The Swede had driven from Haparanda where he lives and
works across the border to Torneå. The Finnish customs claimed that he should then be deemed to be
living in Finland and required to pay vehicle tax there. They referred to EU Directive 83/1827/EEC (1).

Their interpretation was disputed in this case and the then MEP Birgitta Ahlqvist (s) in January 1998 asked
the Council Presidency, the UK on that occasion, for an interpretation. The Council President referred to a
practical identical case on the Danish and German border. The court in that case had ruled that a person
living and working in one country may not be regarded as living in another country simply because he or
she was spending their nights with a person in the other country. The Council pointed out that the
Commission had to ensure that the Court of Justice ruling was complied with, and should therefore
examine this particular case.

What was the outcome of the Commission’s examination of this case?

(1) OJ L 105, 23.4.1983, p. 59.