WRITTEN QUESTION P-2322/00

by Hartmut Nassauer (PPE-DE) to the Commission

(30 June 2000)

Subject: Differences in the taxation of diesel fuel in the EU Member States

German farmers are not permitted to import from France marked diesel fuel (in particular, heating oil), as this would contravene § 26 of the Mineralölsteuergesetz (Law on excise duty on mineral oils). Tax treatment of the French diesel fuel is significantly more favourable than that of German diesel fuel, which means that, because of the national ban on imports, German farmers are forced to pay a higher price than their French neighbours for their diesel fuel. Such discrimination is only possible because Article 8(2)(f) of Council Directive 92/81(1) of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils expressly provides that EU Member States may apply total or partial exemptions or reductions in the rate of duty to mineral oils or other products for the same uses which are used under fiscal control exclusively for agricultural or horticultural purposes, etc.

1. What action does the Commission intend to take in order to end this state of affairs which discriminates against German farmers?

2. Does the Commission have plans for possible harmonisation of legislation on excise duty on mineral oils within the EU, which would mean uniform taxation of mineral oils in the Member States?

(1) OJ L 316, 31.10.1992, p. 12.

Answer given by Mr Bolkestein on behalf of the Commission

(31 July 2000)

The prices of diesel used as fuel in agriculture for vehicles such as tractors and stationary machinery, as well as for other uses including heating greenhouses, vary considerably between Member States. Fuel price differentials are mainly due to differences in tax levels, in particular the way each Member State applies the fiscal provisions in Community legislation. Differences in competitive structure of the oil markets can also play a role in determining the level of fuel prices.

German farmers are not forbidden by Community law from buying diesel fuel in France or in another Member State. Under Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products(1) (Article 9.3) Member States may provide that excise duty becomes chargeable in the Member State of consumption if mineral oils already released for consumption in another Member State are transported using atypical modes of transport (namely by other means than in the tanks of vehicle or in fuel canisters by private individuals or on their behalf).

Under Community legislation, in particular Council Directive 92/81/EEC on the harmonisation of the structures of excise duties on mineral oils(2) (Article 8 (2f)), Member States can apply total or partial exemptions or reductions in the rate of duty to mineral oils to be used, under fiscal control, exclusively in agricultural and horticultural works, in forestry and inland fisheries. Therefore, Member States are entitled not to apply the full minimum rate of excise duty on diesel used as propellant, which is fixed at 245 per 1 000 litres (Article 5(1) of Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils(4)), but to apply a rate ranging between 245 and zero. VAT rates applied on diesel used for agricultural purposes (16 % in Germany and 19,6 % in France) contribute to some extent to price differentials on the market.

It is clear, therefore, that each Member State has a discretion to determine the level of excise duty charged on mineral oils to be used exclusively in agriculture.

1. A Commission proposal for a Council directive presented in March 1997(3) aims to modernise the Community system for the taxation of mineral oils and allow the Community to reap the full benefit of the single market. This proposal provides (Article 7) a reduced minimum rate of excise duty to be applied Community-wide on diesel used as propellant in agriculture, the level of which should be fixed in a first stage at 32 per 1 000 litres. This proposal should contribute considerably, if adopted, to the approximation of taxation levels applied by individual Member States on mineral oils used in agriculture.

2. The Commission has for the time being no plans to propose legislation to harmonise the levels of taxation of mineral oils used in Community agriculture. Under current circumstances, it seems that such approach has no chance of being adopted by the Council, since less ambitious proposals, like that of 1997, have not yet been adopted. The adoption of legislation on fiscal matters has been proved very difficult to achieve due to the unanimity rule in the Treaty.

(1) OJ L 76, 23.2.1992.

(2) OJ L 316, 31.10.1992.

(3) OJ C 139, 6.5.1997.

(4) OJ L 316, 31.10.1992.