The gas companies in the Montoro case have saved up to 51 million euros in taxes in just ten years.

Barcelona / MadridInitially, the gas companies were met with a resounding rejection. In October 2013, a law was passed that allowed certain sectors an 85% reduction in the taxable base of the electricity tax. Some gas manufacturers approached the Ministry of Finance, requesting that they, as an industry in which the electricity consumed accounts for more than 50% of the cost of the product they manufacture, also qualify for this discount. The ministry's response at the time was that the "limitations imposed by the restrictive budgetary framework" made it impossible. Even the State Tax Administration Agency (AEAT) concluded that extending the tax reduction to this type of company would be "difficult to control."

As stated in the summary of the Montoro caseAccording to the report, to which ARA has had access, the gas companies did not give up. Coordinated through the Association of Industrial and Medicinal Gas Manufacturers (AFGIM), they attempted to contact Catalan parliamentarians, carried out other lobbying actions, requested meetings with the Treasury leadership... but given the limited results they obtained, they reached a conclusion: "The easiest thing is not to influence the Catalan parliamentarians, it is to have a direct link with Minister Cristóbal Montoro," one of the directors of a gas company admitted in an email. From that moment on, everything changed.

The firm founded by the former Finance Minister, with direct ties to the Treasury leadership, began negotiating the reform, but the ministry's attitude shifted: the gas companies met with the minister himself, and the door to reform was now open. The case file reveals that the five companies allegedly paid a total of €270,000 to the economic firm for a brief 12-page technical report. "Equipo Económico was hired for its influence" and not for the report, the Mossos d'Esquadra conclude. According to approximate calculations made by the Tax Agency in June 2023, it was a more than profitable deal for these five gas companies (Air Liquide, Carburos Metálicos, Messer, Linde, and Praxair). With the electricity tax reform they achieved in 2014 (which came into effect in 2015), the researchers extrapolated the cumulative profit the affected gas companies would have obtained over ten years (at the time of writing the report) and concluded that it amounts to €41 million. This amount, therefore, would have been lost to the public coffers.

But it doesn't end there. A few years later, specifically in 2018, the case file records a similar move. In this case, the tax affected is the economic activities tax (IAE), and the Economic Team and AFGIM once again come into play in its modification. Ultimately, they achieved success through a change incorporated into the 2018 general state budget. In this case, the investigation reveals that the accumulated savings for the five gas companies over five years is allegedly around €10.5 million. Thus, with the two legal modifications, the five companies would have avoided paying more than €51 million that the state failed to collect. "According to the companies' own internal calculations, just one of the gas companies investigated, Carburos Metálicos, would have seen annual savings of €438,276.50," the case file states.

Involvement in the drafting

One of the revelations from the case file is that the gas companies themselves were allegedly involved in drafting the reformed laws, particularly with regard to the electricity tax. What was ultimately approved differed little from a draft they proposed, according to the Mossos d'Esquadra, who described it as a possible "undue substitution in the exercise of regulatory powers." According to the Catalan police, the economic office had "sufficient influence not only to achieve the legislative change, but also to actively participate in the regulatory development" of the law.

Within a year, the reform was already approved, and the effect was immediate: the Tax Agency admitted that in just one year it had lost €20 million in revenue due to the reform's implementation, as revealed in the agency's 2015 Annual Tax Collection Report. In other words, this electricity tax exemption was already in effect in 2014 and resulted in €39 million less for the public coffers. The following year, when the reform tailored to gas companies had already been approved (and more companies could join), the State saw €59 million in revenue disappear.

This figure, however, includes other companies that had previously benefited from the 85% deduction. Regarding the gas companies that hired Equipo Económico alone, a report from the Tax Agency estimates that from the moment the regulation was approved until the time of writing this report, a period of 10 years, the gas companies saved €41 million. However, the reduction in the tax on economic activities (IAE) has yet to be added to this benefit.

The second tax

For years, the gas sector companies themselves had been demanding a change in the decree that established the rates payable for the IAE (Equity Tax). Specifically, the five companies were seeking more flexible taxation of this tax, contrary to the opinion of the municipalities, which are its owners. In this case, there was a distinction between the production of low-pressure liquefied/industrial gases and the production of compressed gases. The latter was more costly for the gas companies, who were requesting the rate applicable to liquefied/industrial gases.

The lawsuit dates back at least to 1999. However, until 2017, the gas companies had not managed to exert sufficient pressure to force the Treasury to assess the claim. Once again, the Mossos d'Esquadra suspect that the gas companies participated in drafting the lawsuit and even saw the state budget before the legislative chambers. €10.5 million. They calculate this through a savings projection from one of the gas companies and assume that all would be on equal footing.