Corrigendum to Council Directive 2004/74/EC of 29 April 2004 amending Directive 2003/96/EC as regards the possibility for certain Member States to apply, in respect of energy products and electricity, temporary exemptions or reductions in the levels of taxation (OJ L 157, 30.4.2004)
Date: 2004-06-02
Institutions: Council of the European Union, European Parliament
Subjects: accession to the European Union, derogation from EU law, electrical energy, energy-generating product, tax exemption, tax system, transitional period (EU)

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Corrigendum to Council Directive 2004/74/EC of 29 April 2004 amending Directive 2003/96/EC as regards the
possibility for certain Member States to apply, in respect of energy products and electricity, temporary
exemptions or reductions in the levels of taxation

(Official Journal of the European Union L 157 of 30 April 2004)

Directive 2004/74/EC should read as follows:

COUNCIL DIRECTIVE 2004/74/EC
of 29 April 2004
amending Directive 2003/96/EC as regards the possibility for certain Member States to apply,
in respect of energy products and electricity, temporary exemptions or reductions in the levels
of taxation

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Article 93 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

Whereas:

(1)

Council Directive 2003/96/EC of 27 October 2003
restructuring the Community framework for the taxation
of energy products and electricity (3) replaced, with effect
from 1 January 2004, Council Directive 92/81/EEC of
19 October 1992 on the harmonisation of the structures
of excise duties on mineral oils (4) and Council Directive
92/82/EEC of 19 October 1992 on the approximation of
the rates of excise duties on mineral oils (5). It defines the
fiscal structures and the levels of taxation to be imposed on
energy products and electricity.

(2)

The minimum rates set by Directive 2003/96/EC are liable
to create serious economic and social difficulties for cer-
tain Member States, namely Cyprus, the Czech Republic,

(1) Opinion delivered on 30 March 2004 (not yet published in the Offi-

cial Journal).

(2) Opinion delivered on 31 March 2004 (not yet published in the Offi-

cial Journal).

(3) OJ L 283, 31.10.2003, p. 51.
(4) OJ L 316, 31.10.1992, p. 12. Directive as amended by

Directive 94/74/EC. (OJ L 365, 31.121994, p. 46)

(5) OJ L 316, 31.10.1992, p. 19. Directive as amended by

Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slov-
enia and Slovakia, in view of the comparatively low level
of excise duties previously applied, the ongoing economic
transition of those Member States, their relatively low
income levels and their limited ability to offset that addi-
tional tax burden by reducing other taxes. In particular, the
price increases brought about by application of the mini-
mum rates set by Directive 2003/96/EC are likely to have
an adverse effect on their citizens and national economies,
creating for instance an unbearable burden for small and
medium-sized enterprises.

(3)

(4)

(5)

Those Member States should therefore be permitted, on a
temporary basis, to apply additional exemptions from or
reduced levels of taxation, where it will not be detrimental
to the proper functioning of the internal market and will
not result in the distortion of competition. Moreover, con-
sistent with the principles in accordance with which tran-
sitional periods were originally granted pursuant to Direc-
tive 2003/96/EC, any such measures should be designed to
bring about a progressive alignment with the applicable
Community minimum rates.

The 2003 Treaty of Accession (6) provides for transitional
arrangements, in the case of Poland and Cyprus, for the
implementation of Directives 92/81/EEC and 92/82/EEC.
The Treaty also provides for specific measures on issues
relating to energy in Lithuania and Estonia. Those mea-
sures should be adequately taken into account in the con-
text of permitting dedicated tax exemptions.

This Directive should not prejudice the outcome of any
procedures relating to distortions of the operation of the
single market that may be undertaken, in particular pursu-
ant to Articles 87 and 88 of the Treaty. It should not over-
ride the requirement for Member States to notify instances
of potential State aid to the Commission pursuant to
Article 88 of the Treaty.

Directive 94/74/EC.

(6) OJ L 236, 23.9.2003, p. 17.

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(6)

Certain provisions of Directive 2003/96/EC should be
clarified as regards the references to the transitional period
set out therein.

(7)

Directive 2003/96/EC should therefore be amended
accordingly,

The Republic of Estonia may apply a transitional period
4.
until 1 January 2010 to adjust its national level of taxation
on gas oil used as propellant to the new minimum level of
EUR 330 per 1 000 l. However, the level of taxation on gas
oil used as propellant shall be no less than EUR 245 per
1 000 l as from 1 May 2004.

HAS ADOPTED THIS DIRECTIVE:

Article 1

Directive 2003/96/EC is hereby amended as follows:

1. Article 18 is hereby amended as follows:

(a)

in paragraph 1, the first subparagraph is replaced by the
following:

‘By way of derogation from the provisions of the present
Directive, the Member States specified in Annex II are
authorised to continue to apply the reductions in the lev-
els of taxation or the exemptions set out in that Annex.’;

(b)

in paragraph 2, ‘in paragraphs 3 to 12 is replaced by ‘in
paragraphs 3 to 13’.

2. The following Article is inserted:

‘Article 18a

1.
By way of derogation from the provisions of the present
Directive, the Member States specified in Annex III are autho-
rised to apply the reductions in the levels of taxation or the
exemptions set out in that Annex.

Subject to a prior review by the Council, on the basis of a
proposal from the Commission, this authorisation shall
expire on 31 December 2006 or on the date specified in
Annex III.

Notwithstanding the periods set out in paragraphs 3 to
2.
11 and provided that this does not significantly distort com-
petition, Member States with difficulties in implementing the
new minimum levels of taxation shall be allowed a transi-
tional period until 1 January 2007, particularly in order to
avoid jeopardising price stability.

The Republic of Estonia may apply a transitional period until
1 January 2010 to adjust its national level of taxation on
unleaded petrol used as propellant to the new minimum level
of EUR 359 per 1 000 l. However, the level of taxation on
unleaded petrol shall be no less than EUR 287 per 1 000 l as
from 1 May 2004.

The Republic of Estonia may apply a total exemption from
taxation of oil shale until 1 January 2009. Until 1 January
2013, it may furthermore apply a reduced rate in the level of
taxation of oil shale, provided that it does not result in taxa-
tion at below 50 % of the relevant Community minimum
rate as from 1 January 2011.

The Republic of Estonia may apply a transitional period until
1 January 2010 to adjust its national level of taxation on
shale oil used for district heating purposes to the minimum
level of taxation.

The Republic of Estonia may apply a transitional period until
1 January 2010 to convert its current input electricity taxa-
tion system into an output electricity taxation system.

5.
The Republic of Latvia may apply a transitional period
until 1 January 2011 to adjust its national level of taxation
on gas oil and kerosene used as propellant to the new mini-
mum level of EUR 302 per 1 000 l and until 1 January 2013
to reach EUR 330. However, the level of taxation on gas oil
and kerosene shall be no less than EUR 245 per 1 000 l as
from 1 May 2004 and no less than EUR 274 per 1 000 l as
from 1 January 2008.

The Republic of Latvia may apply a transitional period until
1 January 2011 to adjust its national level of taxation on
unleaded petrol used as propellant to the new minimum level
of EUR 359 per 1 000 l. However, the level of taxation on
unleaded petrol cannot be less than EUR 287 per 1 000 l as
from 1 May 2004 and no less than EUR 323 per 1 000 l as
from 1 January 2008.

3.
The Czech Republic may apply total or partial exemp-
tions or reductions in the level of taxation of electricity, solid
fuels and natural gas until 1 January 2008.

The Republic of Latvia may apply a transitional period until
1 January 2010 to adjust its national level of taxation on
heavy fuel oil used for district heating purposes to the mini-
mum level of taxation.

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The Republic of Latvia may apply a transitional period until
1 January 2010 to adjust its national level of taxation on elec-
tricity to the relevant minimum levels of taxation. However,
the level of taxation on electricity shall be no less than 50 %
of the relevant Community minimum rates as from 1 Janu-
ary 2007.

The Republic of Malta may apply a transitional period until
1 January 2010 to adjust its national level of taxation on
unleaded petrol and leaded petrol used as propellant to the
relevant minimum levels of taxation. However, the levels of
taxation on unleaded petrol and leaded petrol shall be no less
than EUR 287 per 1 000 l and EUR 337 per 1 000 l respec-
tively as from 1 May 2004.

The Republic of Latvia may apply a transitional period until
1 January 2009 to adjust its national level of taxation on coal
and coke to the relevant minimum levels of taxation. How-
ever, the level of taxation on coal and coke shall be no less
than 50 % of the relevant Community minimum rates as
from 1 January 2007.

The Republic of Malta may apply a transitional period until
1 January 2010 to adjust its national level of taxation on
natural gas used as heating fuel to the relevant minimum lev-
els of taxation. However, the effective tax rates applied to
natural gas shall be no less than 50 % of the relevant Com-
munity minimum rates as from 1 January 2007.

6.
The Republic of Lithuania may apply a transitional
period until 1 January 2011 to adjust its national level of
taxation on gas oil and kerosene used as propellant to the
new minimum level of EUR 302 per 1 000 l and until 1 Janu-
ary 2013 to reach EUR 330. However, the level of taxation
on gas oil and kerosene shall be no less than EUR 245 per
1 000 l as from 1 May 2004 and no less than EUR 274 per
1 000 l as from 1 January 2008.

The Republic of Lithuania may apply a transitional period
until 1 January 2011 to adjust its national level of taxation
on unleaded petrol used as propellant to the new minimum
level of EUR 359 per 1 000 l. However, the level of taxation
on unleaded petrol shall be no less than EUR 287 per 1 000 l
as from 1 May 2004 and no less than EUR 323 per 1 000 l
as from 1 January 2008.

7.
The Republic of Hungary may apply a transitional
period until 1 January 2010 to adjust its national level of
taxation on electricity, natural gas, coal and coke, used for
district heating purposes, to the relevant minimum levels of
taxation.

8.
The Republic of Malta may apply a transitional period
until 1 January 2010 to adjust its national level of taxation
on electricity. However, the levels of taxation on electricity
shall be no less than 50 % of the relevant Community mini-
mum rates as from 1 January 2007.

The Republic of Malta may apply a transitional period until
1 January 2010 to adjust its national level of taxation on gas
oil and kerosene used as propellant to the minimum levels of
EUR 330 per 1 000 l. However, the levels of taxation on gas
oil and kerosene used as propellant shall be no less than
EUR 245 per 1 000 l as from 1 May 2004.

The Republic of Malta may apply a transitional period until
1 January 2009 to adjust its national level of taxation on
solid fuel to the relevant minimum levels of taxation. How-
ever, the effective tax rates applied to the energy products
concerned shall be no less than 50 % of the relevant Com-
munity minimum rates as from 1 January 2007.

The Republic of Poland may apply a transitional period
9.
until 1 January 2009 to adjust its national level of taxation
on unleaded petrol used as propellant to the new minimum
level of EUR 359 per 1 000 l. However, the level of taxation
on unleaded petrol shall be no less than EUR 287 per 1 000 l
as from 1 May 2004.

The Republic of Poland may apply a transitional period until
1 January 2010 to adjust its national level of taxation on gas
oil used as propellant to the new minimum level of EUR 302
per 1 000 l and until 1 January 2012 to reach EUR 330.
However, the level of taxation on gas oil shall be no less than
EUR 245 per 1 000 l as from 1 May 2004 and no less than
EUR 274 per 1 000 l as from 1 January 2008.

The Republic of Poland may apply a transitional period until
1 January 2008 to adjust its national level of taxation on
heavy fuel oil to the new minimum level of EUR 15 per
1 000 kg. However, the level of taxation on heavy fuel oil
shall be no less than EUR 13 per 1 000 kg as from 1 May
2004.

The Republic of Poland may apply a transitional period until
1 January 2012 to adjust its national level of taxation on coal
and coke used for district heating to the relevant minimum
level of taxation.

The Republic of Poland may apply a transitional period until
1 January 2012 to adjust its national level of taxation on coal
and coke used for heating purposes other than district heat-
ing to the relevant minimum levels of taxation.

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The Republic of Poland may, until 1 January 2008, apply
total or partial exemptions or reductions for gas oil used as
heating fuel by schools, nursery schools and other public
utilities, in respect of the activities or transactions in which
they engage as public authorities.

The Republic of Poland may apply a transitional period until
1 January 2006 to align its electricity taxation system with
the Community framework.

10.
The Republic of Slovenia may apply, under fiscal con-
trol, total or partial exemption from or reduction in the level
of taxation to natural gas. The total or partial exemption or
reduction may apply until May 2014 or until the national
share of natural gas in final energy consumption reaches
25 %, whichever is the sooner. However, as soon as the
national share of natural gas in final energy consumption
reaches 20 %, it shall apply a strictly positive level of taxa-
tion, which shall increase on a yearly basis in order to reach
at least the minimum rate at the end of the period referred to
above.

11.
The Slovak Republic may apply a transitional period
until 1 January 2010 to adjust its national level of taxation
on electricity and natural gas used as heating fuel to the rel-
evant minimum levels of taxation. However, the level of taxa-
tion on electricity and natural gas used as heating fuel shall
be no less than 50 % of the relevant Community minimum
rates as from 1 January 2007.

The Slovak Republic may apply a transitional period until
1 January 2009 to adjust its national level of taxation on
solid fuels to the relevant minimum levels of taxation. How-
ever, the level of taxation on solid fuels shall be no less than
50 % of the relevant Community minimum rates as from
1 January 2007.

12. Within the transitional periods established, Member
States shall progressively reduce their respective gaps with
regard to the new minimum levels of taxation. However,

where the difference between the national level and the mini-
mum level does not exceed 3 % of that minimum level, the
Member State concerned may wait until the end of the period
to adjust its national level’.

3. An Annex III, which is set out in the Annex to this Directive,

is added.

Article 2

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive from 1 May 2004. They shall forthwith communicate to
the Commission the text of those provisions and a correlation
table between those provisions and this Directive.

When Member States adopt those provisions, they shall contain a
reference to this Directive or be accompanied by such a reference
on the occasion of their official publication. Member States shall
determine how such reference is to be made.

2. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field covered by this Directive.

Article 3

This Directive shall enter into force on 1 May 2004.

Article 4

This Directive is addressed to the Member States.

Done at Luxembourg, 29 April 2004.

For the Council
The President
M. McDOWELL

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‘ANNEX III

ANNEX

Reduced rates of taxation and exemptions from such taxation referred to in Article 18a(1):

1.

Latvia

— for energy products and electricity used in local public passenger transport vehicles;

2.

Lithuania

— for coal, coke and lignite, until 1 January 2007,

— for natural gas and electricity, until 1 January 2010,

— for orimulsion used for purposes other than to produce electricity or heat until 1 January 2010;

3. Hungary

— for coal and coke, until 1 January 2009;

4. Malta

— for navigation in private pleasure craft,

— for air navigation other than that covered by Article 14(1)(b) of Directive 2003/96/EC;

5.

Poland

— for aviation fuel and turbo-combustion engine fuels and engine oils for aviation engines, sold by the producer of
such fuels on the order of the Minister of National Defence or the competent minister for internal affairs, for pur-
poses of the aviation industry, or the Agency of Material Reserves to supplement State reserves, or organisational
units of sanitary aviation for purposes of such units,

— gas oil for ship engines and engines for sea technology and engine oils for ship engines and for sea technology,
sold by the producer of such fuel on the order of the Agency of Stock Reserves to supplement State reserves, or
on the order of the Minister of National Defence to be used for purposes of the navy, or on the order of the com-
petent minister for internal affairs to be used for sea engineering,

— aviation fuel, turbo-combustion engine fuel and gas oil for ship engines and engines for sea technology and oils
for aviation engines, ship engines and engines for sea technology, sold by the Agency of Stock Reserves on the
order of the Minister of National Defence or the competent minister for internal affairs.’