05/08/2008
A preliminary ruling by Juliane Kokott, Advocate General of the European Court of Justice, said on Thursday the Basque Country can have its own Basque tax system because it fulfils the three requirements needed to regulate and manage taxes usually available to countries with a Treasury system.
The advocate general’s ruling, which is not a definitive judgement, usually serves as a basis for most of the judgements of the court.
The ruling stems from a question by the Basque High Court on whether the Basque tax system distorts competition and intra-community trade and the Basque Country can have its own tax system or must follow the Spanish tax system to regulate taxes.
According to the ruling, the Basque Country fulfils the requirements needed to allow any region to regulate and manage taxes usually available to countries with a Treasury system: institutional, procedural and economic autonomy.
The Azores
A similar ruling dismissed in September 2006 action brought by Portugal against the adaptation of the national tax system to regional particularities in The Azores. The Court ruled on the criteria establishing the political and fiscal independence of a regional body in relation to the central State in State aid cases.
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