Cases Initiated regarding the Regulation on Applying the Subsidized Energy Tax
On 16 May 2014 two more cases regarding the constitutionality of the provisions of the Law on Subsidized Energy Tax have been initiated by the Constitutional Court.
Having regard to an application by Ltd. “Arsenal Energy”, Ltd. “EcoZeta”, Ltd. “ENERCOM PLUS”, Ltd. “Ošmaļi Energy””, Ltd. “Piejūra Energy”, Ltd. “Winergy”, Ltd. “Zemgales enerģijas parks” and Ltd. “Zemgaļi JR” case “On Compliance of Para 1 of Section 3 and Para 1 of Section 4 of the Law on Subsidized Energy Tax with Article 1 and Article 105 of the Satversme of the Republic of Latvia” was initiated.
Having regard to an application by Ltd. “KEGO”, joint–stock company “Residence Energy”, Ltd. “SGC” and Ltd. “Uni-enerkom” a case “On Compliance of Para 1 of Section 3 and Section 5 of the Law on Subsidized Energy Tax” with Article 1 and Article 105 of the Satversme of the Republic of Latvia.”
A similar case already was initiated by the Constitutional Court on 9 May of the current year.
Contested Norms
Para 1 of Section 3 of the Law on Subsidized Energy Tax provides: “Tax shall be applicable to revenue gained from: 1) the electricity sold in the framework of mandatory electricity procurement.” Whereas Para 1 of Section 4 of the Subsidized Energy Tax Law provides: “Tax-payers are the producers of electricity, who have the right to: 1) sell electricity in the framework of mandatory procurement.” Section 5 of the Law defines the tax rates.
The contested norms are in force since 1 January of the current year.
Norms of Higher Legal Force
Article 1 of the Satversme: “Latvia is an independent democratic republic.”
Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases in the basis of a specific law and in return for fair compensation.”
The Facts
Pursuant to the contested norms the applicants have the obligation to pay the subsidized energy tax as of 1 January of the current year. It is noted in the application, inter alia, that the tax is disproportional and poses a threat to the commenced business activities; moreover, the tax had been introduced hastily.
Legal Proceedings
The Constitutional Court has asked the Saeima to provide a reply on the facts of the case and legal substantiation by 16 July 2014.
The term for preparing the case is 16 October 2014. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-14-01