Spain reforms its tax on fluorinated greenhouse gases

Law 14/2022, of 8 July, amending Law 19/2013, of 9 December, on transparency, access to public information and good governance, was published in the Spanish Official State Gazette on 9 July 2022. 

This law aims to regulate the statistics of micro, small and medium-sized enterprises (SMEs) in public procurement. The first of the final provisions of Law 14/2022 amends the tax on fluorinated greenhouse gases with effect from 1 September 2022 and regulates the "warehouse holder" as a taxpayer. In addition, Royal Decree 712/2020, of 30 August, approving the Fluorinated Greenhouse Gases Regulation was published on 31 August.

Reducing emissions

This tax aims to reduce emissions of fluorinated greenhouse gases and its amendment is one of the commitments assumed with the European Commission by Spain and included in Spain's Recovery, Transformation and Resilience Plan (in compliance with Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021, establishing the Recovery and Resilience Facility).

How the tax is levied

This tax is an indirect tax, levied on the manufacture, importation, intra-Community acquisition or unlawful possession of fluorinated greenhouse gases.

The taxable event is deemed to have occurred irrespective of whether these gases are packaged in containers or are incorporated into products, equipment or appliances.

Taxpayers are those persons engaged in the manufacture, importation, intra-Community acquisition or unlawful possession of the gases on which the tax is levied.

The accrual of the tax is deferred if the gases are delivered to a warehouse after their manufacture, importation or intra-Community acquisition. In this case, the taxable event will occur when the gases are delivered or placed at the disposal of a party who is not considered a warehouse holder or when use is made of the gases. The warehouse holder must obtain the relevant authorisation.

This tax refers to hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF₆) listed in Annex I of Regulation (EU) 517/2014 of the European Parliament of the Council on fluorinated greenhouse gases. Mixtures containing at least one of the above substances are also included.

Exemptions

An exemption is envisaged in the following cases:

• The manufacture, importation or intra-Community acquisition of gases intended to be used as raw material for their chemical transformation in a process in which their composition is entirely altered, be marketed in order to be destroyed, be used in military equipment, or be incorporated into ships or aircraft that carry out international maritime or air navigation, excluding private recreational navigation.
• The intra-Community acquisition of gases which, before the end of the return filing period, are to be shipped to a place outside the territory in which the tax is applicable.
• The importation or intra-Community acquisition of gases contained in products that form part of the personal luggage of persons travelling from a third territory, provided that they are not shipped for commercial purposes.

The manufacture, importation or intra-Community acquisition of sulphur hexafluoride (SF₆) intended to be used in the manufacture of electrical products, if labelled appropriately, will be exempt from this tax up until 31 March 2023. In addition, an exemption also applies through 31 December 2026 for the corresponding gases which are to be used in metered dose inhalers for the supply of pharmaceutical ingredients .

The following are not subject to this tax:

• The manufacture, importation, intra-Community acquisition or unlawful possession, in the territory in which the tax is applicable, of gases with a global warning potential (GWP) equal to or higher than  150.
• The manufacture of gases intended to be used in a territory other than Spain. 
• The shipment outside the Spanish territory of gases to which the special accrual rule for warehouse holders of fluorinated gases has been applied.

Tax base and rate

The tax base for this tax is the weight of the gases expressed in kilograms.

The tax rate is determined by applying a coefficient of 0.015 to the global warning potential corresponding to each gas subject to the tax at the time of the taxable event, with a maximum limit of 100 euros per kilogramme.

General rules established

General rules are established for this tax, including the fact that taxpayers must self-assess the tax and make the corresponding payment. The tax must be assessed on a quarterly basis.

Manufacturers, warehouse holders, importers and intra-Community acquirers are also required to keep electronic accounting records of the gases on which the tax is levied and, where appropriate, of the raw materials necessary to obtain them.

Imports are regulated by customs regulations.

Taxpayers are obliged to register in the Tax on Fluorinated Greenhouse Gases Territorial Register. Registration must be carried out before the start of the activity. Taxpayers registered as of 31 August 2022 can be entered as warehouse holders at the request of the interested party.

A specific penalties regime has been established.

Osborne Clarke comment

The approved amendment of the tax on fluorinated greenhouse gases extends its scope and establishes new formal requirements designed to better control the collection potential of this tax. This tax entails an increase in costs, which taxpayers should take into account.