Country:European Union
Policy status:In Force
Date Effective:2004
Policy Type:Economic Instruments>Fiscal/financial incentives>Taxes
Policy Target:Multiple RE Sources>Power, Multiple RE Sources>All, Multiple RE Sources>CHP, Multiple RE Sources>Heating
Policy Sector:Multi-sectoral Policy
Agency:European Commission DG Taxation and Customs Union
Legal References:Directive 2004/75/EC
Description:The Directive on the taxation of energy products provides for minimum rates of taxation of mineral oils, coal, natural gas and electricity when used as motor fuel or heating fuel. It also proposes exemptions and transition periods for the application of these rates depending on products, uses and the countries concerned. It authorises the Member States to apply other exemptions and reduced levels of taxation where this is not detrimental to the proper functioning of the internal market or free competition. The Directive can be used to apply total or partial tax exemptions or reductions to products in the field of pilot projects for the technological development of more environmentally-friendly products or in relation to fuels from renewable resources. In particular, the Directive will: - reduce distortions of competition that currently exist between Member States as a result of divergent rates of tax on energy products, - reduce distortions of competition between mineral oils and the other energy products that have not been subject to Community tax legislation up to now, - increase incentives to use energy more efficiently (to reduce dependency on imported energy and to cut carbon dioxide emissions), and - allow Member States to offer companies tax incentives in return for specific undertakings to reduce emissions. The exemption or reduction in taxation should be adjusted by each Member State to take account of change in raw material prices to avoid over-compensating for the extra costs involved in the manufacture of these products.

Last modified: Tue, 10 Jul 2012 15:02:15 CEST