Spain’s High Court rejects suspension of windfall tax requested by Repsol

Granting the request would have lead to a suspension of the levy that Spain imposed on large energy firms and banks in December, through which government aims to raise 7 billion euros ($7.5 billion) by 2024 to ease cost of living pressures.

On Friday, the court said that its decision would not cause “irreparable damage” since companies could be reimbursed with interest if an eventual challenge succeeds.

Spanish banking associations and the electricity lobby, have also lodged an appeal before Spain’s High Court challenging the ministerial order (…) that imposes the new levy.

The court has yet to take a decision on the appeal but on Friday addressed the request for the suspension.

The court said that an injunction would cause “serious harm to the general interest” as the main purpose of the law is to demand a greater effort from those with greater economic capacity during the current energy crisis and amidst high inflation.

Spanish banking and electricity associations challenged the order on the grounds that the tax distorted competition and was discriminatory, but did not seek a suspension.

Repsol’s petition for an injunction shows its determination in opposing the tax, which it considers incompatible with Spanish and European Union law.

Repsol, which declined to comment on Friday, said on Thursday it wanted to tax to be removed and if successful seek a refund of the amounts collected.

Apart from challenging the order, companies can also appeal directly against tax authorities to reclaim the money once they have made their first payment, due before Feb. 20.