EU: State Aid Rulings for Denmark
Commission authorises proposed Danish CO 2 tax reductions under certain conditions but refuses amendment to Danish tonnage tax scheme.
CO 2 Tax Reductions
According to the Commission press release:
- In September 2006, the Commission opened a formal investigation regarding the proposal by the Danish Government to introduce an exemption from the national CO 2 tax on fuel consumption for industrial activities covered by the EU Emission Trading System (ETS).
- The Commission's investigation found that there are important differences between the Danish energy tax, of which the CO 2 tax is one element, and the EU ETS. The EU ETS aims at reducing CO 2 emissions and therefore has a much narrower objective than an energy tax which aims at reducing CO 2 emissions but also at energy-saving and generating state revenue.
- If the proposed measure was amended, so that all concerned companies would pay a tax on energy respecting the EU minima, the Commission's concerns would be removed. The Commission, therefore, approved the measure under the condition that it is amended so that all companies pay the harmonised EU minima.
Danish Tonnage Tax Scheme
According to the Commission press release:
- Community law requires all tonnage tax schemes within the Community to contain ring-fencing measures aimed at avoiding possible abuses to ensure that these very favourable taxation schemes are not extended to activities other than maritime transport.
- The Danish authorities had proposed to exempt maritime companies which benefit from a tonnage tax regime from their obligation to systematically send fiscal authorities financial information relating to their transactions with any of their foreign affiliates.
- On the basis of its investigation, the Commission took the view that the proposed change could deteriorate significantly one of the ring-fencing measures linked to the scheme, namely the monitoring of commercial transactions between companies subject to this scheme and their possible affiliates in other Member States or countries in the European Economic Area.
