Energy Tax Incentives and the GBER Regime

Abstract

In all Member States of the European Union, tax benefits or tax relief granted in the context of a harmonized energy tax are a frequent phenomenon. Most of those tax expenditure rules have been introduced at the discretion of the Member States, based on the authorizations of Article 5 and 15-19 of the Energy Tax Directive. Since the implementation of the optional categories of energy tax relief described above depends on national political preferences, Article 26 (2) of the Energy Tax Directive clarifies that such preferential treatment can constitute State aid. In such a case the measure normally has to be notified to the Commission for approval. No such need for notification exists, though, and the respective aid scheme is automatically approved, to the extent that it is covered by the General Block Exemption Regulation (GBER). This paper analyses whether the nature of tax relief measures in the context of harmonised energy taxation can justify a specific treatment under the GBER, and in particular, whether it can justify a more global exception for energy tax incentives beyond the categories of tax incentives that are currently eligible for a waiver of notification requirements. The paper has been accepted as a contribution to the Jean Monnet project 553321-EPP-1-2014-1-ESPPJMO-PROJECT.

Keywords: energy taxes, GBER, State Aid

JEL Classification: H24, K34