EU To Examine Tax Breaks For Hauliers

by Ulrika Lomas, Tax-News.com, Brussels

07 February 2002

Controversy has broken out within the European Union over an attempt by France, the Netherlands, and Italy to prevent the European Commission from banning special tax breaks for hauliers.

The tax breaks were introduced following the fuel tax protests of September 2000, and the EC had been scheduled to decide on Tuesday whether they are in conflict with EU single market principles.

However, the three countries forestalled this decision by asking all European Union members to support the state aid, a move which has bought them a little more time. Under EU rules, once such a request for support has been made, EU members have around three months to decide whether 'exceptional circumstances' justify the granting of tax breaks.

However, EC officials have claimed that the French, Dutch, and Italian systems are distortionary, because they represent specific rebates on excise duty on fuel for hauliers rather than general tax cuts which would benefit all motorists.

Reports have suggested that if this plan backfires and EU members rule against them, attempting to pre-empt Brussels could cost the three countries in question dear, as Commission officials may demand that the tax breaks be returned.

Recommended