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Spain: Regional taxes on large retail establishments

Spain: Regional taxes on large retail establishments

The Court of Justice of the European Union (CJEU) today issued a judgment concluding that the regional taxes imposed by certain Spanish autonomous communities on large retail establishments are compatible with EU law. The CJEU found that the purpose of the taxes is to contribute to environmental protection and to town and country planning by attempting to correct and counterbalance the adverse effects of large retail establishments.


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The joined cases are Cases C-233 to C-237/16. 


As explained in a related release [PDF 166 KB] from the CJEU, three Spanish autonomous communities, Catalonia (Case C-233/16), Asturias (Cases C-234/16 and C-235/16) and Aragon (Cases C-236/16 and C-237/16) introduced regional taxes on large retail establishments located in their respective territories. The taxes are intended to offset the potential impact of those large retail establishments on the territory and the environment, and revenue from those taxes is to be used to fund environmental action plans and make improvements to infrastructure. 

The Asociación Nacional de Grandes Empresas de Distribución (a national association of large distribution companies) challenged the lawfulness of the taxes in question before the Spanish courts and filed a complaint with the European Commission. The Tribunal Supremo (Supreme Court, Spain) referred the issue to the CJEU for a decision as to the compatibility of the regional taxes with the freedom of establishment and whether exemptions available from the taxes could constitute state aid that would be prohibited under the FEU Treaty. 

In today’s judgments, the CJEU found that neither freedom of establishment nor the law on state aid precludes taxes on large retail establishments as in these cases.

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