2005/767/EC: Council Decision of 24 October 2005 authorising France to apply differentiated levels of taxation to motor fuels in accordance with Article 19 of Directive 2003/96/EC
Date: 2005-11-04
Institutions: Council of the European Union
Subjects: France, derogation from EU law, diesel fuel, energy-generating product, fuel tax, lead-free petrol

4.11.2005

EN

Official Journal of the European Union

L 290/25

COUNCIL DECISION

of 24 October 2005

authorising France to apply differentiated levels of taxation to motor fuels in accordance with
Article 19 of Directive 2003/96/EC

(2005/767/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

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 thereof,

Having regard to the proposal from the Commission,

Whereas:

By letter dated 16 June 2004 France requested author-
isation to apply differentiated levels of taxation to gas oil
and unleaded petrol for the purposes of an administrative
reform involving the decentralisation of certain specific
powers currently exercised by central government.

The decentralisation planned by France is part of an
approach designed to increase administrative effectiveness
by improving the quality and reducing the cost of public
services. It is also part of a policy of subsidiarity, allowing
for decisions to be adopted on many domains at the
appropriate level. The possibility of regional differen-
tiation offers regions an additional incentive to improve
the quality of
their administration in a transparent
fashion. The reductions should be linked to the socio-
economic conditions of the regions in which they are
applied.

Derogations cannot be authorised for indefinite periods.
Article 19(2) of Directive 2003/96/EC restricts
the
reductions of
duration of
taxation applicable to energy and electricity products to
six years with the possibility of renewal.

exemptions or

further

the excise rates
The low level of differentiation of
between regions and the differences in retail prices
the risk of
among distribution networks imply that
traffic detours
an
risk of
the
increase in environmentally damaging emissions will be
very low. This will also meet the needs of the energy
policy.

consequently,

and,

(1)

(2)

(3)

(4)

(5)

cases where

limited number of

lution of excise duties contemplated by France. For the
very
commercial
movement
takes place under duty-paid arrangements,
the planned procedures of control are of a non-discrimi-
natory nature and, subject to a regular review of their
intra-
practicalities, without
Community movement of duty-paid products. Under
these conditions,
the decentralisation of excise duties
does not seem to hinder the proper functioning of the
internal market.

impact

real

the

on

(6)

(7)

(8)

The very tight limits set for the differentiation of duty
rates between regions should ensure that the decentrali-
sation of excise duties will not distort competition on the
oil products market. Moreover, the differentiation should
be compensated by the large price differences among
distribution networks. As the requested measure does
not apply to commercial diesel, any distortion of compe-
tition on the freight and passenger transport markets
should be excluded.

The increase in national rates which will precede the
possibility of regional reductions in rates leads to the
conclusion that the application of the French measure
should not
in any hindrance to
Community policy on environmental protection.

in principle result

reviews

The Commission regularly
and
exemptions to check that they do not distort competition
or hinder the operation of the internal market and are
not incompatible with Community policy on protection
of the environment, energy and transport,

reductions

HAS ADOPTED THIS DECISION:

Article 1

1.
France is hereby authorised to apply reduced levels of
taxation to unleaded petrol and gas oil used as fuel. Gas oil
for commercial use within the meaning of Article 7(2) of
Directive 2003/96/EC shall not be eligible for any such
reductions.

The intra-Community commercial movement of diesel
takes place almost completely
and unleaded petrol
under duty suspension arrangements. This
form of
intra-Community movement is not affected by the devo-

2.
Administrative regions may be permitted to apply differ-
entiated reductions provided the following conditions are
fulfilled:

(1) OJ L 283, 31.10.2003, p. 51. Directive as last amended by Directive

2004/74/EC (OJ L 157, 30.4.2004, p. 87).

(a)

the reductions are no greater than EUR 35,4 per 1 000 litres
of unleaded petrol or EUR 23,0 per 1 000 litres of gas oil;

L 290/26

EN

Official Journal of the European Union

4.11.2005

(b) the reductions are no greater than the difference between
the levels of taxation of gas oil for non-commercial use and
gas oil for commercial use;

(c)

the reductions are linked to the objective socioeconomic
conditions of the regions in which they are applied;

Article 2

This Decision shall expire three years after the date of imple-
mentation of the provisions of Article 1(2).

Article 3

This Decision is addressed to the French Republic.

(d) the application of regional reductions does not have the
effect of granting a region a competitive advantage in
intra-Community trade.

Done at Luxembourg, 24 October 2005.

3.
The reduced levels must comply with the requirements of
Directive 2003/96/EC, and in particular the minimum levels laid
down in Article 7.

For the Council
The President

B. BRADSHAW