Article Article 44 - Aid in the form of reductions in environmental taxes under Directive

2003/96/EC

Key environmental_tax, ETD, minimum_level_of_taxation, tax_exemption

words

Member SI
State

Question Question
1. What is the minimum level of taxation set by Directive 2003/96/EC that the
beneficiaries of the tax reduction shall pay according to Article 44(2) of GBER? Are
the following conclusions correct?
- Article 15 of the Directive 2003/96/EC: minimal level of taxation is 0.
- Article 17(1)(a)(b) of the Directive 2003/96/EC: minimal levels of taxation are
determined in Annex 1 of Directive 2003/96/EC.
- Article 17(2) of the Directive 2003/96/EC: minimal level of taxation is 0 (for energy-
intensive businesses, having regard to paragraph 4).
- Article 17(3) of the Directive 2003/96/EC: minimal level of taxation is 50 % of the
levels determined in Annex 1 (for businesses which are not energy-intensive,
having regard to paragraph 4).
2. Are tax exemptions for use of energy products and electricity provided for in
Article 2(4)(b) of the Directive 2003/96/EC regarded as state aid?

Creation
Date

COMP Reply
Reply
1. Directive 2003/96/EC (the "Energy Tax Directive" or "ETD") introduces
harmonised EU minimum taxation levels in the field of energy taxes (taxes applied
to energy products and electricity). These minimum levels are listed by product in
Annex I to the ETD.
The ETD furthermore contains certain obligations or possibilities for Member States
to exempt certain energy products from taxation or to apply reduced rates to them.
Articles 15 and 17 contain such possibilities, but any actual application of these
possibilities is at the discretion of the Member States, and therefore subject to State
aid control.
Aid in the form of reductions in environmental taxes under Directive 2003/96/EC
can be exempted from the notification requirement contained in Art. 108(3) TFEU if
the conditions contained in Article 44 GBER are fulfilled. Article 44(2) GBER
provides that beneficiaries must at least still pay the applicable minimum level of
taxation set by the ETD. The minimum level of taxation referred to in the GBER is
the respective minimum level listed in Annex I to the ETD. In other words, Article 44
GBER can only be applied in cases where tax reductions are given to some
undertakings or groups of undertakings while these still pay taxes equal or above
the minimum levels contained in Annex I to the ETD). In such cases, all other
conditions of art. 44 GBER should equally be complied with.
2. Under Article 107 TFEU, the qualification of a measure as State aid requires the
following conditions to be met: a) the measure must be financed through State
resources; b) it must grant a selective advantage liable to favour certain
 undertakings or the production of certain goods; c) the measure must distort or
threaten to distort competition and have the potential to affect trade between
Member States.
If these conditions are cumulatively met with respect to a measure introducing tax
exemptions for use of energy products and electricity as provided for in Article
2(4)(b) ETD, that measure will indeed constitute State aid.
Of specific importance in such cases is the selectivity-test, and in particular whether
the measure is justified by the nature and logic of the reference system of taxation.
For an example, reference is made to decision SA.37320 (2014/NN).

Article Article 44 - Aid in the form of reductions in environmental taxes under Directive
2003/96/EC

Key Excise duty exemption for the mines

words

Member EE
State

Question Question
According to Art 44 tax reductions in environmental taxes under Directive
2003/96/EC can be granted provided the beneficiaries shall be selected on the
basis on transparent and objective criteria and shall pay at least minimum level of
taxation set by the Directive.
Article 8(2)(d) of the Directive 2003/96/EC sets the minimum levels of taxation
applicable to products used as motor fuels for vehicles intended for use off the
public roadway or which have not been granted authorisation for use mainly on the
public roadway.
Can this paragraph be applied under GBER Article 44 in case we want to restrict
the application of theminimum level of taxation only to the vehicles intended to use
in the mines (for example mining of oil shale, sand, gravel, dolomite, limestone,
peat and etc)? For products used as motor fuels for othervehicles intended to use
off the public roadway the minimum level of taxation will not apply – they will pay
the normal rate of excise duty.

Creation 2016.02.25
Date

COMP Reply
Reply
The Commission recalls that Article 44 of the GBER sets forth that the beneficiaries
of the tax reduction shall be selected on the basis of transparent and objective
criteria and that the minimum level of taxation for a certain use of motor fuel must
always apply as laid out in Directive 2003/96/EC. Recital (64) of the GBER further
explains that the aid should be granted in the same way for all competitors found to
be in a similar factual situation. Consequently, selection criteria that will result in
discriminatory taxation of undertakings in the same situation within one sector
cannot be considered objective. Therefore, it must be ensured that providing the
environmental taxation advantage to a single type of fuel user does not discriminate
against undertakings who would have to pay higher taxes and who would
nonetheless fall in the same business domain of fuel users off the public roadway.
 Disclaimer: This reply does not represent a formal and definite position of the
European Commission but is only an informal guidance provided by the services of
DG Competition to facilitate the application of the GBER. It is therefore not binding
and cannot create legal certainty or legitimate expectations.

Article Article 44 - Aid in the form of reductions in environmental taxes under Directive
2003/96/EC

Key excise_duty, environmental_taxes, biofuels, agriculture

words

Member BG
State

Question Question
Republic of Bulgaria has developed a draft State aid scheme “Reduced excise duty
on gas oil used in primary agricultural production" based on Article 44 of
Commission Regulation (EU) No 651/2014 of 17 June 2014 on declaring certain
categories of aid compatible with the internal market in application of Articles 107
and 108 of the Treaty (Regulation (EU) No 651/2014).
The draft State aid scheme provides for a reduced excise duty on gas oil used in
primary agricultural production. The difference between the standard excise duty
rate on gas oil and the reduced excise duty rate on gas oil used in primary
agricultural production will be reimbursed to the aid beneficiaries based on
transparent and objective criteria. The reduced excise duty rate on gas oil will be
consistent with the minimum levels of taxation provided for in Article 8 of Directive
2003/96/EC.
The expenditure for excise duty on fuel (gas oil with CN codes from 2710 1941 to
2710 1949) used for the purpose of primary agricultural production shall be deemed
eligible under the scheme.
Article 47 of the Energy from Renewable Sources Law sets a requirement for
minimum content of biofuels in mineral fuels that are released for consumption. The
provisions of the Law transpose the requirements of Directive 2009/28/EC of the
European Parliament and of the Council of 23 April 2009 on the promotion of the
use of energy from renewable sources and amending and subsequently repealing
Directives 2001/77/EC and 2003/30/EC.
The gas oil used in primary agricultural production contains a minimum
biocomponent (e.g. biodiesel minimum 4 per cent by volume).
In the light of the above, Bulgaria requests an answer to the following questions:
1. Is it allowed to support agricultural producers in the form of reduced excise duty
on gas oil used in primary agricultural production under the conditions specified
above on the grounds of Article 44 of GBER?
2. Is the aid compatible for gas oil containing a biocomponent as per the minimum
requirements for minimum content of biofuels in mineral fuels?
3. In the event the answer to question 2 is POSITIVE, please clarify whether for the
purposes of calculating the reduced rate we have to exclude from the aid the
volume content of the biofuel in the gas oil?
4. In the event the answer to question 2 is NEGATIVE, please clarify in which cases
and for what type of fuel the aid would be compatible?