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
Date: 1998-12-16
Institutions: European Commission
Subjects: application of EU law, excise duty, mineral oil, petrol, tariff exemption

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 

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