mogan tourist tax annulled canary islands

Mogán tourist tax annulled by Canary Islands High Court

Mogán’s tourist tax thrown out by court

The Canary Islands High Court (TSJC) has annulled the pioneering tourist tax ordinance introduced by the Mogán town council, ruling that it effectively camouflaged a tax that goes beyond its legal powers. In a ruling handed down on 28 May but made public this Monday, the court’s administrative division upheld an appeal by the Las Palmas Provincial Federation of Hospitality and Tourism Businesses (FEHT).

How the tax worked

Mogán’s council, led by Mayor Onalia Bueno (Juntos por Mogán), approved the so-called Fiscal Ordinance Regulating the Fee for Services and Activities Derived from Tourism and the Obligation of Sustainability in February 2025. The ordinance set a daily charge of 15 cents per person for anyone staying overnight in accommodation within the municipality. The council justified the measure by arguing that, as a tourist destination, it needed the revenue to mitigate the impact of tourism on the local area and ensure the sustainability of public services. To facilitate collection of this pioneering municipal fee, the ordinance required property owners of tourist accommodation to collect it on the council’s behalf. According to information provided by Mogán council to the media last May, in its first year of operation the tax raised 1.4 million euros.

Mayor put review on hold

At the time, the mayor said she had frozen any review of the charges until the council had judicial backing – backing that never came. Both the tourist industry and opposition parties in Mogán (Nueva Canarias and the PSOE) opposed the initiative and warned it was illegal.

The hospitality industry’s legal challenge

FEHT took the case to court, arguing that the ordinance breached the principle that taxes must be established by law. It contended that the taxable event – the reason for paying the charge – was based on vague, abstract and generic definitions that made it impossible to determine exactly what specific services the fee was supposed to fund. The federation also alleged a violation of the principle of economic capacity, because the ordinance did not differentiate between accommodation categories, and pointed out flaws in the financial calculations, such as omitting income from grants or including general council operating expenses. In addition, it complained that the burden of collecting the charge was shifted onto the tourist establishments themselves.

Court’s ruling: a disguised tax

In the ruling made public on Monday, the court stated that while eco-taxes may have a commendable environmental protection purpose, local authorities have limited tax-raising powers. This means that, in cases like Mogán’s, the concept of a fee is distorted to disguise a tax with a purely revenue-raising aim. The court agreed with the hospitality industry that the taxable event – the reason for the charge – was based on ambiguous, imprecise, generic and abstract expressions such as “actions derived from tourism,” “environmental projects,” “circular economy” and “historical heritage.” This lack of definition, the court continued, prevents citizens from knowing with certainty what budget determines their obligation to pay, which clashes with legal precedent requiring that services financed by a fee must be defined in a clear, precise and unambiguous manner.

Cost calculations flawed

The ruling stresses that a fee cannot collect more than the cost of the service provided, under the principle of equivalence. By using the fee as a general financing mechanism, Bueno’s administration failed to demonstrate this balance. The court also questioned the council’s economic report. By way of example, it noted that the report included the total value of multi-annual investments under costs, rather than only the portion corresponding to annual depreciation. It also mixed the number of official bed spaces with the number of people actually staying overnight, distorting the result.

Judge’s unusual apology

The ruling, for which Judge Francisco José Gómez Cáceres was the rapporteur, is not final and orders the council to pay the legal costs of the appeal, capped at 3,000 euros. In the background to the ruling, the judge apologises to the parties for the delay in issuing the decision. Gómez Cáceres confesses that it took a month longer than expected because the draft ruling ran to 350 pages – a fact the judge himself describes as “as true as it is absurd” – and had to be cut down to the final 39 pages. “This delay is not the reason I am apologising, nor any other delay I may have incurred. Nor do I want with these words to extinguish the consequences of the lateness, which I will shoulder as a man of integrity must face things. I only want to put on record, once again, my deep gratitude to the recipients of these lines,” the judge writes. He concludes: “To my surprise, it seems that a long professional career has not prepared me to face these complications, that is, to convey my regret easily and with any plausibility.”

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