EC Reviews Derogations In Energy Tax Directive

by Ulrika Lomas, for LawAndTax-News.com, Brussels

06 July 2006

The European Commission has this week adopted a Communication in which it reviews more than one hundred derogations in the Energy Tax Directive that are due to expire by the end of 2006.

The review concludes that most of the derogations are no longer needed, as the tax measure can continue to be applied on the basis of the optional provisions foreseen for such purposes by the Energy Tax Directive. For those that cannot be applied after 2006 unless a new derogation is granted by the Council, the Communication indicates the Commission's view.

"The expiry of the derogations is an important step towards the effective implementation of the Energy Tax Directive," explained László Kovács, Commissioner responsible for Taxation and Customs Union, adding:

"I invite the Member States to take today's Communication into consideration when assessing their interest in renewing any of the derogations".

Before the adoption of the Energy Tax Directive, Member States could apply certain tax measures on the basis of the specific Council derogations. Some of those measures were justified, for example, by environmental or energy policy objectives. Such policy objectives have since been integrated into the Energy Tax Directive.

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