Last 14th July 2021, the European Commission (hereinafter EC) presented a proposal for a Regulation of the European Parliament and of the Council establishing a carbon border adjustment mechanism (hereinafter, CBAM), with which it is intended to match  the carbon price paid for EU products operating under the EU ETS and for imported products. This will only be possible by forcing companies importing into the EU to buy so-called CBAM certificates, in order to pay for the difference between the carbon price paid in the country of production and the carbon price in the EU ETS. 

The proposal for a Regulation outlines a decentralised approach delegating certain essential functions and their implementation to the Member States' authorities, subject in any case to supervision and coordination by the European authorities. Thus, this Regulation establishes general guidelines, which are being negotiated by the Member States.
 
In the meetings held during the week of 13 to 18 December 2022, MS approved an Interim Agreement with the Council to create the CBAM, which states that it will enter into force from 1 October 2023. To know more about this topic please click on the following link.

As you may know, on April 10th, 2022, Law 7/2022 of April 8, on waste and contaminated soils for a circular economy (hereinafter, LRSC) entered into force. This Act introduces a new indirect tax levied on the manufacturing, import and intra-EU acquisitions of non-reusable plastic containers, with effect from 1 January 2023.
 
Although for the time being there is no regulatory development (we are all waiting for it), the fact is that this tax poses important problems in terms of its implementation as it triggers the obligation to report a series of data, both in the return that is pending for approval and in the stock ledgers.
 
It should be noted that from a practical perspective, this tax is a hybrid between VAT and excise duties as it requires the maintenance of a stock ledger based on data totally alien to the fiscal / financial world and that, in many cases have not been registered in the companies’ ERP, such as for example the weight of non- recycled plastic contained in the packaging.
 
Therefore, the main problem we are facing is the identification of the data to be reported or the obligation to certify the weight of recycled plastic of the containers since, although until January 1st, 2024, it would be possible for the suppliers to provide a responsible declaration regarding the content of recycled plastic, as from 1st January 2024 onwards an official certification will be required.

It is important to note that, when facing such a project, there are a series of questions that allow us to size its scope affecting the purchases and / or sales flows of the containers used for raw materials, intermediate products and / or finished products.
 
Thus, in the case of purchase flows, the basic questions would be the following:

As for sales flows, the questions would be as follows:

If after answering any of these questions, you conclude that your organization could be affected by this tax, in bln palao abogados, S.L.P. together with MAROSA we will be happy to arrange an appointment or meeting, in order to analyze in greater detail the impact of this tax on your organization and, where appropriate, detail our work methodology that combines a solid knowledge of indirect taxes and extensive experience in issues related to the so-called tax technology.
 
Belén Palao Bastardés
Partner Director- bln palao abogados, S.L.P.
belen.palao@blnpalao.com
 
 
Pedro Pestana da Silva
Partner Director- MAROSA
pps@marosavat.com

The 18th June 2015, the Central Economic and Administrative Court adopted a Decision revoking a fine imposed to a solar thermal plant that, during the periods subject to review, had been producing power without being registered for excise duties purposes.

Between 2012 and 2014, both included, the tax auditors have been assessing many tax infringement procedures, as they considered that such a behaviour qualified as a severe tax infringement, imposing penalties amounting to 100% of the taxes upon the total energy produced (art. 19.3 of the Excise Duties Act).

Although the Decision confirms the registration as a substantial element in order to benefit from the excise duties suspensive regime, it states that, under the new regime in force as of 1st January 2015, such lack of registration is no more considered a tax infringement. Such a conclusion has been reached based on the Decision issued by the Customs Central Department the 2nd March 2015 where the Customs Central Department said that since the Excise Duties Act is an ordinary Act, the principle of the most favourable rule is applicable. As per such, since this behavious does not qualify under the new regime as a tax infringement, no fine should be imposed.

The TEAC reproduces the guidelines outlined by the Legal Services of the Customs Central Department according to which, in principle, there should be no more infringement procedures open against power plants that, under the previous regime, produced energy without being registered for excise duties purposes.

In the event of files pending for resolution by the Tax Authorities or under review/ appeal (i.e. recurso de reposición), the Tax Authorities will issue new assessments cancelling the previous ones.

Finally, if the assessments have been already appealed before the economic and administrative courts, they should be annulled based on the previous arguments.

We recommend those taxpayers affected by such a Resolution to review their files and to act accordingly. Should you need more information in this respect, please do not hesitate to contact us by e-mail (info@blnpalao.com).