TCPP: COM must reimburse 3.45 M€, but expects to pay at least 8.3 M€
The consumption tax on petroleum products (TCPP), introduced in 2012 by the Collectivité, was ruled last March by the Court of Cassation to be inconsistent with European law because it is akin to a customs duty rather than a simple domestic consumption tax. However, according to European regulations and the CARIFORUM Agreement (a trade agreement between certain Caribbean countries and the European Union), products imported between these member countries cannot be subject to customs duties.
Since the Court of Cassation is the highest court in France, there is no further recourse to overturn this decision. The COM must therefore take note of this. On the one hand, it has ceased collecting the tax since mid-March (though it has not yet repealed it in the General Tax Code). On the other hand, it must proceed with the reimbursement of the amounts collected. This course of action was the subject of a resolution adopted by the elected members of the Territorial Council during a plenary session on Saturday.
The TCPP was paid by seven importers of petroleum products (which were then distributed to gas stations) and EDF to supply the power plant. The proceedings were initiated by one of these seven operators, GEDC (Gestion Exploitation Dépôt Carburant), which filed a claim with the COM to be reimbursed.
Reimbursement to GEDC
GEDC is entitled to claim reimbursement of the amounts paid during the period covered by the legal proceedings, namely between 2013 and 2016*. This amounts to 3.45 million euros. “This is a certain debt. The COM must issue the payment order immediately, or at least as soon as possible,” explained the Legal Affairs Department.
In addition, the importer has requested reimbursement for other periods—not covered by the court’s decision—totaling 1.16 million euros. The COM has taken note of this and will include this amount in its supplemental budget as a provision for litigation. In total, the amount to be reimbursed to GEDC amounts to 4.61 million euros.
Reimbursement for other operators
According to the COM, the six other fuel distributors are in an “identical legal situation” and could claim between 3.7 and 5.5 million euros. To date, no reimbursement requests have been filed.
Nevertheless, the COM acknowledges that the risk of such a claim being filed is “likely.” Consequently, it has taken proactive measures by asking elected officials to set aside a contingency reserve to be included in the supplemental budget. The amount selected is the “lower” end of the range, or 3.7 million euros.
In total, the COM will need to include 8.31 million euros in its supplemental budget.
Reimbursement to EDF
EDF also imports petroleum products to fuel its power plant and has paid the TCPP. However, to date, it has not filed a refund claim, which could amount to 17.1 million euros. The COM considers the risk that EDF will do so to be “theoretical” and has chosen not to set aside a provision. It will record this amount as an “off-balance-sheet commitment in the notes to the financial statements.” If EDF were to request a refund, the COM would have to set aside a provision for the amount.
Responsibilities
The COM has taken note of the Court of Cassation’s decision, even though it was not directly found liable. In fact, the legal proceedings were initiated against the customs service, which was responsible for collecting the TCPP on behalf of the COM through 2023 under an agreement. Vice President Alain Richardson stated that the COM would seek legal counsel to conduct a “thorough” analysis of the Court of Cassation’s decision, identify the roles and responsibilities of Customs and the COM, and understand “what led to this ruling.” The COM has already contacted the regional customs office, which referred it to the central administration in Paris, which has not yet responded. The aim is to determine how and why customs collected a tax that did not comply with European law on behalf of the COM without informing it.
Can consumers get a refund?
This seems unlikely, even though motorists and boat owners have paid this tax indirectly. It is not the gas stations that pay the TCPP, but the importers. And in most cases, these are separate entities: one company imports petroleum products, which are then distributed to gas stations by another company; the former thus passes on the TCPP to the latter, which may factor it into its price at the pump.
However, a gas station may be considered an importer if it brings in its own fuel on its own behalf, for example by bringing in tanker trucks from the Dutch side.
As for EDF, the electricity bill does not show the TCPP. This tax is one of the factors that determines the local cost of production, but does not directly affect the price of electricity, which is the same throughout France for EDF customers. The TCPP is one of the additional production costs for EDF in Saint Martin.
* GEDC filed a lawsuit challenging this tax in 2016 for the period 2013–2016.
