# Council Implementing Decision of 29 September 2014 authorising Italy to apply, in determined geographical areas, reduced rates            of taxation on gas oil and LPG used for heating purposes in accordance with Article 19 of Directive 2003/96/EC (2014/695/EU)         

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U.K.

# Council Implementing Decision

# of 29 September 2014

# authorising Italy to apply, in determined geographical areas, reduced rates of taxation on gas oil and LPG used for heating                        purposes in accordance with Article 19 of Directive 2003/96/EC                     

# (2014/695/EU)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of                           energy products and electricity(1), and in particular Article 19(1) thereof,                        

Having regard to the proposal from the European Commission,

Whereas:

(1)Pursuant to Article 19(1) of Directive 2003/96/EC, Italy was authorised to apply in certain particularly disadvantaged areas                              reduced rates of excise duty on gas oil and LPG used for heating. The latest authorisation was granted until 31 December 2012                              by Council Decision 2008/318/EC(2).

(2)By letter dated 31 May 2012, the Italian authorities requested authorisation to apply in certain particularly disadvantaged                              geographical areas reduced rates of taxation on gas oil and LPG used for heating purposes, by way of extension of the practice                              followed under Decision 2008/318/EC, before that Decision would expire. Additional information and clarification were provided                              by the Italian authorities on 4 December 2012, 16 July 2013, 31 December 2013 and 22 January 2014. By letter dated 19 March                              2014, the Italian authorities requested a renewal of the authorisation granted by Decision 2008/318/EC without changes in                              its territorial scope for the period from 1 January 2013 to 31 December 2018.

(3)Italy has very a diversified territory with variable climate and geographical conditions. Taking into account the particularities                              of its territory, Italy has introduced reduced rates of taxation on gas oil and LPG with the purpose of partially offsetting                              the disproportionately high heating costs for residents in certain geographical areas.

(4)The tax differentiation in Italy is based on objective criteria and aims at putting the population of the eligible areas on                              a more comparable footing with the rest of the population by means of reducing their disproportionately high heating costs,                              which are due to severe climate conditions or difficulties with fuel procurement.

(5)The reduced rates of taxation are applicable in geographical areas fulfilling one of the following criteria: (a) most severe                              climate conditions within the Italian territory, that is communes falling into zone F as defined in the Presidential Decree                              No 412 of 1993(3); (b) severe climate conditions combined with difficulties with fuel procurement, that is communes falling into zone E as                              defined in the Presidential Decree No 412 of 1993; and (c) geographical isolation combined with difficult and costly fuel                              procurement, that is Sardinia and small islands. Since the development of the natural gas network would, to a significant                              extent, reduce the additional heating costs and would lead to a greater diversity of fuel supply, where appropriate, the reduced                              rates of taxation should only be applied until the completion of the natural gas network in the communes concerned.

(6)The requested measure has been reviewed by the Commission and been found not to distort competition or hinder the operation                              of the internal market, and it is not considered incompatible with EU policy on the environment, energy and transport. The                              reduced rate of taxation both for gas oil and LPG would remain higher than the EU minimum levels of taxation set out in Directive                              2003/96/EC and it would only partially alleviate the additional heating costs incurred in the geographical areas in question.

(7)The requested measure would apply only to space heating purposes (both for private individuals and businesses) and it would                              not apply to other forms of business use of gas oil and LPG. According to the Italian authorities, the amount of the tax advantage                              for business users would in each particular case be covered by Commission Regulation (EU) No 1407/2013(4). Nevertheless, if the benefit to any single undertaking exceeds the ceiling laid down in that Regulation, it should be notified                              to the Commission in accordance with Council Regulation (EU) No 734/2013(5).

(8)In order to ensure that the measure would apply without interruption in respect of the authorisation to apply reduced rates                              of excise duties granted by Decision 2008/318/EC, which expired on 31 December 2012, it would be appropriate that this Decision                              applies from 1 January 2013. The continuous application of the regime of reduced rates of excise duties would contribute to                              guaranteeing legal certainty and would not undermine the legitimate expectations of the population of the eligible areas.                              Therefore, it would be appropriate to grant the authorisation for six years. This period of application would provide the                              Italian authorities with sufficient time to assess the environmental effect of the measure. It would also indicate that in                              the future more targeted energy saving measures would need to be put in place in order to improve energy efficiency and to                              ensure a positive effect on the environment,

HAS ADOPTED THIS DECISION:

# Article 1U.K.

1.Italy is hereby authorised to apply reduced rates of taxation to gas oil and LPG used for heating purposes in the following                        disadvantaged geographical areas:                  

(a)communes falling within the climate zone F as established by the Presidential Decree of 26 August 1993 No 412;                  

(b)communes falling within the climate zone E as established by the Presidential Decree of 26 August 1993 No 412;                  

(c)communes of Sardinia and small islands, that is, all Italian islands except Sicily.                  

2.In order to avoid any overcompensation, the reduction shall not go beyond the additional costs of heating in the areas in                        question. In the particular case of Sardinia and small islands, as a consequence, the tax reduction shall not put the price                        below the price of the same fuel on the Italian mainland.                  

3.The reduced rate shall comply with the requirements set out in Directive 2003/96/EC, and in particular with the minimum levels                        of taxation laid down in Article 9 thereof.                  

# Article 2U.K.

The eligibility of the geographical areas referred to in points (b) and (c) of Article 1(1) shall be subject to the non-availability                     of the natural gas network in the commune.                  

# Article 3U.K.

This Decision shall apply from 1 January 2013 until 31 December 2018.

# Article 4U.K.

This Decision is addressed to the Italian Republic.

Done at Brussels, 29 September 2014.

*For the Council*                            

*The President*                            

S. Gozi                            

1

OJ L 283, 31.10.2003, p. 51.                           

2

Council Decision 2008/318/EC of 7 April 2008 authorising Italy to apply, in determined geographical areas, reduced rates of                              taxation on gas oil and LPG used for heating purposes in accordance with Article 19 of Directive 2003/96/EC (OJ L 109, 19.4.2008, p. 27).                           

3

The Presidential Decree No 412 of 1993 divides the Italian territory into six climate zones (A to F). The classification is                              based on the unit ‘grades per day’ which represents the amount of days per year in which the outside temperature differs from                              the optimum 20 °C and thus heating is needed.                           

4

Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the                              Functioning of the European Union to *de minimis* aid (OJ L 352, 24.12.2013, p. 1).                           

5

Council Regulation (EU) No 734/2013 of 22 July 2013 amending Regulation (EC) No 659/1999 laying down detailed rules for the                              application of Article 93 of the EC Treaty (OJ L 204, 31.7.2013, p. 15).