52000PC0415

Proposal for a COUNCIL DECISION authorising Italy to apply reductions in excise duties on certain mineral oils, used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC .

(presented by the Commission)

EXPLANATORY MEMORANDUM

Under Article 8(4) of Council Directive 92/81/EEC on the harmonisation of the structures of excise duties on mineral oils [1], the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce exemptions from, or reductions in, excise duties for specific policy considerations.

[1] OJ L 316, 31.10.1992, p.12. (Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

In a series of letters, notably a letter received on 29 June 1999 by the Secretariat-General of the Commission, the Italian authorities informed the Commission of their intention to apply a reduced rate for automotive diesel fuel for commercial vehicles.

Italy has changed its system of excise duties on mineral oils to incorporate tax levels based on the CO2 emissions of fuels. This will result in an annual increase in duty on mineral oils until 2005. Italy wishes to introduce a system whereby road hauliers can request repayment of excise duties to offset this increase. The scheme is similar to others already in place in the Netherlands and France.

In accordance with Article 8(4) of the Directive, the Secretariat-General of the Commission informed the other Member States of the measure proposed by the Italian Government, by letter dated 28 July 1999.

In accordance with the third subparagraph of Article 8(4) of the Directive, the Commission sent a Communication to the Council on 10 October 1999 expressing fundamental objections to the application of the derogation request presented by Italy. Its objections concerned the measure's sole application to commercial road hauliers and the procedure for refunding duty to non-Italian hauliers.

Following contacts with Commission officials, the Italian authorities amended their legislation to take these objections into account.

Tax differentials in the transport sector are acceptable under state aid rules if they are intended to ensure the attainment of agreed objectives under the common transport policy, such as environmental objectives, and also respect the minimum rates of excise duty set out in Council Directive 92/82/EEC. The Commission can therefore accept the principle of tax differentials that apply in a non-discriminatory way and seek to temporarily compensate companies and help them adapt to additional costs that they have to bear as a result of a change in the tax system on environmental grounds.

The Directive provides for the Commission to review such exemptions and reductions periodically. If the Commission considers that they may no longer be applied because they distort competition or the operation of the internal market or are incompatible with Community environmental protection policy, it must present appropriate proposals to the Council. In any event, this derogation must be examined no later than 31 December 2000, when the authorisation granted by the Decision expires. The Council will review the situation on the basis of a Commission proposal and decide whether the authorisation should be withdrawn, amended or extended.

Proposal for a COUNCIL DECISION authorising Italy to apply reductions in excise duties on certain mineral oils used for specific purposes, in accordance with the procedure provided for in Article 8(4) of Directive 92/81/EEC

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils [2], and in particular Article 8(4) thereof,

[2] OJ L 316, 31.10.1992, p.12. (Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

Having regard to the proposal from the Commission,

Whereas:

(1) Under Article 8(4) of Directive 92/81/EEC, the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce exemptions from, or reductions in, excise duties on mineral oils on grounds of specific policy considerations.

(2) The Italian authorities have notified the Commission that they wish to apply a reduced rate for automotive diesel fuel for commercial vehicles from 1 January 1999.

(3) The other Member States have been informed thereof.

(4) The Commission regularly reviews reductions and exemptions to check that they are compatible with the operation of the internal market or with Community environmental protection policy.

(5) The authorisation granted by this Decision is without prejudice to the application of the rules on state aid.

(6) The Council must examine this Decision on the basis of a proposal from the Commission no later than 31 December 2000, when the authorisation granted by this Decision expires.

HAS ADOPTED THIS DECISION:

Article 1

In accordance with Article 8(4) of Directive 92/81/EEC Italy is hereby authorised to apply a reduced rate of excise duty on automotive diesel fuel used by road hauliers from 1 January 1999 to 31 December 2000 provided the rate applied complies with the obligations laid down in Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils [3], and in particular the minimum rates laid down in Article 5 thereof.

[3] OJ L 316, 31.10.1992, p.19. (Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46).

Article 2

This Decision is addressed to Italy.

Done at Brussels,

For the Council

The President