State at risk of refunding fuel companies €2.6 billion

​Court of Justice of European Union considers Portugal’s CSR ‘road service tax’ illegal

The Portuguese State may find itself repaying fuel companies €2.6 billion, due a levy the Court of Justice of the European Union (CJEU) considers ‘illegal’.

The CSR (standing for Contribuição do Serviço Rodoviária) is another of the government’s taxes that with the ISP (special tax on fuel) goes towards financing Infraestruturas de Portugal (IP).

Now that the CJEU has considered it illegal, understanding is that the government will have to refund fuel companies for at least part of the CSR they have been forced to part with since it came into force in 2007.

According to Jornal de Negócios,  the CJEU decision was released in February. It has taken this long to reach the nation’s media, however. (In the intervening period, there was even a moment when the new economy minister suggested a further tax on fuel companies, if they make ‘excessive profits’ from the rising cost of fuel).

The CJEU decision followed ‘a challenge’ by fuel company VAP Atlantic, which has heard it should be able to demand a refund of €4.8 million.

This is where the figure of €2.6 billion comes from: Jornal de Negócios says “the decision opens the door to other fuel companies doing the same (as VAP Atlantic), and so being able to recover up to €2.6 billion.

Approached for comment, the Ministry of Finance has “guaranteed it knew about the court decision and is accompanying the evolution of the subject, awaiting the rendering of the final decision of the process”.

If this sounds like playing for time, it could be because the State is also fighting off other challenges from energy companies which, if successful, could see it paying out “tens of millions in compensation demanded”, writes Expresso.

For now, what is clear is that the CJEU considered the CSR illegal because “it doesn’t pursue specific reasons” that justify its existence in terms of consumption taxes.

VAP Atlantic is an authorised dealer in Portugal for Kuwait Petroleum (Q8).

natasha.donn@portugalresident.com