The Oil Operators Association (AOP), the Union of Independent Oil Companies (UPI), the Spanish Confederation of Service Stations (CEEES) and the Spanish Group of Fuel and Fuel Retail Sellers (Aevecar) have put on the Government’s table a battery of measures to fight against fuel fraud.
The associations have presented to the Executive a modification of the VAT Law to try to stop the hole of more than 3,000 million that is being registered due to diesel fraud by “organized crime”, as described by the CEO of Cepsa, Maarten Wetselaar, at the IX Energy Forum of elEconomista.es.
For oil companies, the most feasible option to solve the problem is to adopt the so-called Italian model. This measure consists of that when fuels are purchased within a tax warehouse – with tax exemption – by an operator, he has to pay VAT immediately, so that when you later sell the product you can no longer avoid said income to the Public Treasury.
This measure was adopted in Italy, which was also facing a similar situation since 2019, and the country’s Administration has highlighted its effectiveness and ease of implementation.
The oil companies’ proposal It was picked up by the Popular Party, the PNV, ERC and Juntswhich they intended to be introduced through an amendment to Royal Decree Law 8/2023, which already included some steps taken by the Executive to try to alleviate this situation, but finally it did not manage to enter said package of measures.
Political paralysis
Since then, the political paralysis that the Government is going through – which has a notable difficulty in obtaining sufficient parliamentary support – has meant that this measure continues to sleep the sleep of the righteous and fuel fraud continues to occur with force.
Faced with this situation, companies are looking for alternative options to be able to unblock this proposal, which does not seem to have the support of the socialist Government in principle.
This week the associations reiterated their request to the Ministry of Financebut they still do not receive the support of María Jesús Montero, nor do they receive alternative proposals from her.
Given this situation, companies hope that the PP leads the adoption of the measure within the Bill establishing a Complementary Tax to guarantee a global minimum level of taxation for multinational groups and large national groups, which is currently being processed in the Congress of Deputies through the emergency procedure and that right now keeps the amendments to the articles of the standard open. However, according to industry sources, The Popular Party has not yet presented anything in Parliament.
Serious risk
Wholesale suppliers and service stations emphasize that fraud in fuel distribution is a serious risk in the different phases of the chain and its eradication requires a set of measures in different areas. For this reason, the associations explain the importance of evaluating its implementation and trust that the parliamentary groups will support its approval and incorporation into the final draft of the Law.
Fraud has reached very serious levels and the employers’ associations, although they positively welcome the measures that have already been incorporated, emphasize that these are still insufficient. The Executive itself recognized at the beginning of the year the growing fraudulent practices due to non-compliance with sectoral obligations with respect to the Corporation of Strategic Reserves of Petroleum Products (CORES), the Information System for the Certification of Biofuels (SICBIOS), the National Fund Energy Efficiency (FNEE), as well as tax revenues (VAT, IIEE).
Proposed measures
At an event to present the proposed measures to the Government, held at CEOE last June, UPI proposed that VAT be paid prior to fuel extraction and that operators, regardless of their size, make monthly settlements. This measure would facilitate control by the Tax Administration and speed up the ability to detect fraud.
Regarding biofuels, the Oil Operators Association asked to raise the minimum percentage of the obligation that must be fulfilled through physical sale and also reduce compensatory payments. The oil industry proposes shortening the period in which it is verified whether the operators have fulfilled their obligations to act with greater agility, accompanying this obligation to make compensatory payments for the deficit of certificates of each obligated subject at the time of verification. To do this, the annotation of certificates in favor of a subject would have to be made conditional on the fulfillment of their compensatory obligations, the certification account should be canceled ex officio and the disqualification of those subjects who have not paid said payment on time would have to be processed.
From Aevecar and CEEES, they proposed establish greater controls in the previous links of the chain to have reliable operators. To this end, they consider that the conditions required of wholesale operators should be increased, both in the communication of the start of activity, and through regular supervision of compliance throughout their active life in order to facilitate the identification of the non-compliance and proceed to disqualification. For Aevecar, a financial guarantee would have to be required for operators to start their activity. Keep track of new ones as well as those known as “sleeping operators.”
Can the measure reduce competition?
The Association of Spanish Oil Operators and Distributors – which represents companies such as Biomar, Biovigo Energy, Viroque or MarTankship – assured that the measures proposed in the reform that is currently on the table will only serve to reinforce the power of the large operators through the imposition of guarantees that are very difficult for companies to cover. For this association, the existing problem lies in the complication of the registration of certificates in Sicbios biofuels. Several of Aopyde’s partners are disabled.
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