The ECJ’s Judgment regarding the Tax Autonomy of the Basque Country

Abstract

On 11 September 2008, the European Court of Justice (ECJ) gave its judgment in Joined Cases C-428/06 to C-434/06, ECJ, 11 September 2008, Joined Cases C-428/06 to C-434/06, Unión General de Trabajadores de La Rioja (UGT-Rioja) and Others v. Juntas Generales del Territorio Histórico de Vizcaya and Others. dealing with the legislative autonomy in tax matters of Álava, Biscay and Gipuzkoa, the three”Historical Territories” which make up the Basque Autonomous Community in Spain. For clarity and simplicity, in this article, the author refers to the Basque Autonomous Community as the “Basque Country” and to the territory governed by State tax legislation as the “rest of Spain”, although neither of these terms is entirely precise, especially if the status of Navarre, which enjoys a degree of tax autonomy similar to that of the three territories that comprise the Basque Autonomous Community, is taken into consideration. Most of what is said here would similarly apply to Navarre. In contrast, no part of the discussion applies to the French Basque Country. In this article, the author also uses the terms “State” and “central government” interchangeably to mean the same thing, i.e. the central authorities. The author considers the background to the case, the decision itself and its implications. He believes that the criteria set out by the ECJ confirm the compatibility of Basque financial and tax autonomy with EC law.