Spanish treatment of local taxes on electrical and gas installations


Press release published by the Spanish judiciary on January 3, 2017.

The Spanish Supreme Court has failed in favour of the city councils for considering as ‘buildings’ electrical high-voltage installations and pipelines of gas for the purposes of the calculation of the tax base of the local tax for the use of the local public domain. This Court has rejected appeals by mains, Union Fenosa and Gas Galicia, companies that considered as a mistake the criteria given by the city councils given to those facilities, which impact on the cadastral value of the land and an increase of the tax that they understood not justified.

In five judgments issued in the last days, the Spanish Supreme Court guarantee the local tax regulations of the year 2014 of Arteixo (A Coruña), Serradilla (Caceres) and Villalcampo (Zamora) councils, which established the rates for private use or special use of the local public domain of transport of electrical energy, gas, water and oil facilities.

This Court, against the position of the mentioned companies, considers that the Local Regulation is not contrary to articles 24 and 25 of the Spanish General Local Taxes Law, which establishes the amount of these taxes shall be fixed on the reference value which would market the utility derived from such use or exploitation, if the affected goods were not in the public domain.

For the High Court, “taking into consideration of such infrastructure for calculating the tax base of the local tax is adequate to the purpose pursued by the legislator: If it is for evaluating the utility that provides to the taxpayer the use proprietary or the use special of the domain public local by the installation of them mentioned elements relating to the distribution of electricity, it seems absolutely reasonable to take them into account”.

Although the Spanish Supreme Court concludes that the City Councils have applied objective and non-discriminatory parameters which respect the requirements of article 24.1. to) TRLHL, to determine the tax base and the rates of the local tax contested, however, these decisions have not been unanimous, but on the contrary, three of the seven judges who have issued them considered that the criteria of the companies was correct.

A copy of the press release from the judiciary is attached.

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