The Diplomat
Repsol yesterday launched a veiled threat to stop investing in Spain if there is no stability in the regulatory and fiscal framework, after it became known that the agreement reached between PSOE and SUMAR for the investiture of Pedro Sánchez as President of the Government plans to maintain a tax for energy companies and banking, beyond the year 2024.
In a conference with analysts to present the results for the third quarter of the year, the CEO of Repsol, Josu Jon Imaz, warned that the company, “before making any investment decision in Spain,” will analyze whether the conditions are “ stable and sufficiently attractive to guarantee the profitability of the projects”, and said that, if this is not the case, there are “other alternatives”.
Imaz stated, in relation to the agreement reached by Sánchez and Yolanda Díaz, that it is based on this negotiation between two political parties and does not represent, as of today, “any type of law or project to follow,” Europa Press reports.
However, he insisted that the current extraordinary tax that exists – which taxes 1.2% of the turnover obtained in those companies with income exceeding 1,000 million euros, excluding regulated businesses and activities outside Spain and extra-peninsular areas -, and that makes Repsol the company in the sector most impacted with some 450 million euros this year, “it is illegal, it is unconstitutional, and it is discriminatory.”
“It is impacting and punishing in negative terms the energy companies that invest in industrial assets and that create industrial jobs in the country,” he stated, emphasizing that an extension of this tax “will penalize this company even more, with a clear impact on its investors and in their ability to invest in the energy transition.”
In this regard, he gave as an example that the group’s Chemicals unit in Spain is paying this tax on extraordinary profits based on the turnover figure, “when at a net level it is incurring losses and has difficulties competing in the international market.” ”.
For this reason, he indicated that Repsol plans “large investments” in the transformation of its industrial complexes in Spain, although he considered that “the lack of stability in the regulatory and fiscal framework could condition future investments in industrial projects in the country.”
Imaz pointed out that Spain is “the main geography” where the group is investing and where it plans to continue developing “this great investment” in its industrial assets, although he added that for this to continue to be the case it is necessary “to have a clear regulatory and fiscal framework, predictable and stable.”
Portugal as an alternative
Otherwise, he commented that the company has “other alternatives”, such as Portugal, where it could have international activity in its industrial business.
“But again we are going to carefully analyze what the regulatory and fiscal framework is before making new investment decisions in the Spanish geography. Because we have to protect, above all, our shareholders, our employees,” he highlighted.
For the oil company executive, this special tax “is favoring people who come to the Spanish market, not creating a single industrial job in Spain. And it is punishing the companies that we are investing in Spain. “We are creating industry in Spain,” he said.
Furthermore, he stated that Repsol will fight this tax in both Spanish and European Justice, since there is a “quite important difference” between what the European Council defined as a tax, being temporary to respond to the special conditions of the market and based on profits, and not on turnover as in Spain.
Thus, the company has already filed a contentious-administrative appeal against the special tax in the National Court and went to the European courts, because it considers “that it is also unfair at the European level,” he added.
Furthermore, he warned that in the event that the company’s appeal is overturned in the National Court, Repsol will go to the Constitutional Court, since it believes that the tax “is unconstitutional and is also breaking European competition.”
“I am convinced that we are going to win at the end of the road because something that is unfair, illegal, discriminatory and has a negative impact cannot be approved in any case, and we have to try to solve the problem. Of course in legal terms, and we trust in our judicial system and also in the constitutional framework,” he stated.
