B Law & Tax
06 September 2023

Tax Advisor: Interpretation of “industrial activity” concept to reduce the Electricity Tax base

The requested entity sought to register its facilities in the territorial registry of the II.EE Management Office in order to obtain the 85% reduction in the taxable base of the Special Tax on Electricity. However, the Management Offices rejected these applications, arguing that the entity’s activities did not qualify as industrial activities as established in Article 98.1.f) of the II.EE Law. The interpretation of the term “sector” defined in Directive 2003/96/EC and its relationship with the notion of “economic activity” mentioned in Article 11 of the same Directive, in order to determine the meaning of “industrial activity” in the national regulations, is an issue that is not discussed in this initial step.

However, this issue cannot be considered to be without merit and requires further analysis by the Supreme Court to determine whether or not the provisions of the Directive are complied with and, if so, whether a preliminary question should be referred to the CJEU for validation. The issue of cassation interest lies in the interpretation of the term “industrial activity” in Article 98.1.f) of Law II.EE, either in the light of Directive 2003/96/EC or following the classification of activities established in the Tariffs of the Economic Activities Tax.

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