Professor Marta Villar Ezcurra (San Pablo-CEU University) has recently published an inspiring article on State Aids and Energy Taxes: Towards a Coherent Reference Framework (INTERTAX, Volume 41, Issue 6&7).
In her view “In order to have an internal market efficient and adequate in the area of energy all Union initiatives and legislations relating to this sector need to be continuously and carefully coordinated. Nowadays, State aid rules and energy tax harmonization level do not help to reach these important challenges. Consequently, current reforms and proposal context should be an appropriate opportunity to improve at least the legal benchmark.
Not only the amendments to ETD should be compatible with other energy-related policies as competition policy is, but those policies should also be appropriately adapted to the existent energy taxation framework. Under the State Aid Action Plan it is important to strength economic approach to State aid analysis and to clarify the ‘balancing test’, selectivity and comparability criteria when applying to energy taxes. Common energy taxation undoubtedly represents a great complex issue even if the question of changes in the rate over time and over countries could be solved.
One additional complexity comes from existing energy price structure in different countries, across fuels and across users. Indeed, it is necessary to bear in mind the complex mechanisms of energy as a very multifaceted sector and the tax planning chances nowadays when State aids rules applies. In particular, the existing problems within the relationship between the State aids regime and the ETS should be treated so that they can work effectively. Any lack of coherence would be detrimental to the fulfilment of the long-term Union objectives of building smart and sustainable growth. In the current reviewing process some actual difficulties have to be taken into consideration mainly regarding the proportionality requirements.
Proportionality principle should be better concretized in the main energy tax scenarios such related to the minimum level of taxation required or to carbon leakage. Perhaps the limited scope of the GBER regarding those environmental taxes linked to ETD reduces the current list of problems but this option may not guaranty a desirable high level of legal certainty in other scenarios. We think that the scope of the GBER may be extended for optional tax relief measures even if a safeguard clause may be introduced with the aim of assuring the compliance with the internal market. As UK proposed we consider that at least any reliefs from harmonized taxes which are below the EU minimum rate but in compliance with the ETD should be included in the GBER. Also, it would be needed that DG of Competition would work with other Commission services to ensure that future State aid rules would continue to be compatible with any new Energy Tax Directive”.
If you want to know more please contact Professor Villar: firstname.lastname@example.org