This paper analyses the Judgement of the Court of Justice of the European Union (CJEU) of 7 August 2018, case C-475/17, on the request for a preliminary ruling made by the Estonia Supreme Court on the compatibility between the municipal sales tax, which said country’s legislation allows municipalities to establish, and value added tax (VAT), which is Community-wide in scope. Pursuant to its interpretation of the VAT Directive, the CJEU concluded that this municipal tax is compatible with VAT and therefore endorses its levying. Based on an analysis of said Judgement, this paper assesses its potential transference into domestic Spanish legislation, be this within the current legal framework or as a possible new tax type within a future reform of the local finance system.