COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 16.12.1998 
COM(1998) 793 final 
Proposal for a 
COUNCIL DECISION 
authorising, in accordance with Directive 92/81/EEC, 
certain Member States to apply and to continue to apply 
to certain mineral oils, reduced rates of excise duty or 
exemptions from excise duty, and amending Decision 
97/425/EC 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
BACKGROUND 
The taxation of mineral oils in the Community is currently governed by Council 
Directive 92/81/EEC,1 which specifies products which should be treated as mineral 
oils and the uses which make them liable to tax. It also lays down a number of 
compulsory exemptions from the normal rules on taxation, as well as some optional 
exemptions and reduced rates. In addition, Article 8(4) of the Directive allows the 
Council, acting unanimously on a proposal from the Commission, to authorise a 
Member State to introduce further exemptions or reductions for specific policy 
considerations. At present, ninety such derogations exist. 
According to Article 8(6), the Council, at the latest before 31 December 1996, had to 
review the derogations granted under Article 8(4) on the basis of a report by the 
Commission. This report was duly produced2 and submitted to the Council for 
consideration. The Council Decision that was adopted following this review provides 
that the derogations provided for in Article 3 should be the subject of another Council 
decision providing for the future, to be adopted before 31 December 1998. The 
proposal for a Council Decision set out here provides a further 12 month extension for 
those derogations. This will give further time to consider the position from a State Aid 
point of view. 
In addition, the French authorities have informed the Commission that they wish to 
apply, as from 1 January 1999, a differentiated diesel rate for commercial vehicles. 
In accordance with the Directive, the other Member States have been informed of this 
request. 
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 policy on protection of the environment, it is to present appropriate 
proposals to the Council. In any event, this derogation must be reviewed no later than 
31 December 1999, 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. 
1 Council Directive 92/81/EEC of 19 October 1992, OJ L316, 31.10.1992. 
2 COM (96) 549. 
3 Council Decision 97/425/EC of 30 June 1997, OJ L 182, 10.7.1997, p. 22. 
COUNCIL DECISION 
of 
authorising, in accordance with Directive 92/81/EEC, 
certain Member States to apply and to continue to apply 
to certain mineral oils, reduced rates of excise duty or 
exemptions from excise duty, and amending Decision 
97/425/EC 
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 oils4, and in particular 
Article 8 (4) and (5) thereof, 
Having regard to the proposal from the Commission5, 
Whereas, pursuant to Article 8 (4) of Directive 92/81/EEC, the Council, acting 
unanimously on a proposal from the Commission, authorised Member State to 
introduce exemptions or reductions in the excise duty charged on mineral oils for 
special policy considerations; 
Whereas, pursuant to Article 3 of Council Decision 97/425/EC, the Council is 
required to decide before 31 December 1998 on the basis of a Proposal from the 
Commission whether those derogations which expire on 31 December 1998 should be 
extended for a further specific period; 
Whereas the Commission has been informed by Member States of their intention to 
continue to apply certain such exemptions or reductions which are already provided 
for in their taxation law or to introduce exemptions or reductions; 
Whereas, for specific policy considerations, certain exemptions and reductions should 
continue to have effect until 31 December 1999; whereas there should be provisions 
4 OJ L316, 31.10.92, p 12, Directive as last amended b'/ Directive 94/74/EC (OJ L365, 31.12.94, p 
46). 
5 OJ 
for an extension beyond the above mentioned dates and whereas the reductions or 
exemptions are regularly reviewed1 by the Commission to ensure that they are 
compatible with the operation of the internal market and other objectives of the 
Treaty. 
HAS ADOPTED THIS DECISION: 
Article I 
By way of derogation from the obligations imposed by Directive 92/82/EEC6, the 
following Member States are authorised to apply or to continue' to apply the 
reductions in rates of excise duties or exemptions from excise duty herein specified 
until 31 December 1999 unless the Council unanimously determines before that date 
on a proposal from the Commission whether any or all of these derogations shall be 
modified or extended for a further specific period: 
1. France: 
- for consumption on the island of Corsica, provided that the reduced rates at all times 
respect the minimum rates of duty on mineral oils as provided for under Community 
law, 
- for a differentiated diesel rate for commercial vehicles provided that the rate of duty 
respects the minimum rate provided for under Community law, 
- for an exemption for heavy fuel oil used as fuel for the production of alumina in the 
region of Gardanne. 
2. Italy: 
-.for a reduction in excise duty on petrol consumed on the territory of Friuli-Venezia 
Giulia, provided that the rate of duty respects the minimum rate provided for under 
Community law, 
- for a reduction in the rate of duty for mineral oils consumed in the regions of Udine 
and Trieste, provided that the reduced rates at all times respect the minimum rates of 
duty on mineral oils as provided for under Community law, 
- for an exemption from excise duty on mineral oils used as fuel for alumina 
production in Sardinia, 
- for a reduction in the excise duty on fuel oil for the production of steam, and for gas 
oil used in ovens for drying and 'activating' molecular sieves in Reggio Calabria, 
OJ L316, 31.10.92 pi9, Directive as last amended by Directive 94/74/EC (OJ L365,31.12.94, p46). 
provided that the rate of duty respects the minimum rate provided for under 
Community law. 
3. The Netherlands: 
- for a differentiated diesel rate for commercial vehicles, provided that the rate of duty 
respects the minimum rate provided for under Community law. 
Article 2 
This Decision is addressed to the Member States. 
Done at 
For the Council 
The President 

ISSN 0254-1475 
COM(98) 793 final 
DOCUMENTS 
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