Community Research and Development Information Service - CORDIS

Common system for the taxation of energy products

The European Commission has put forward a proposal for a Directive which will introduce a common system for the taxation of energy products in the European Union. The proposal widens the scope of the Community minimum rate system, presently limited to mineral oils, to all ener...
The European Commission has put forward a proposal for a Directive which will introduce a common system for the taxation of energy products in the European Union. The proposal widens the scope of the Community minimum rate system, presently limited to mineral oils, to all energy products, providing a consistent framework of taxation for the energy sector.

The proposal has been prepared at the request of the ECOFIN Council of March 1996, which called on the Commission to present new proposals in the field of the taxation of energy products. At present, only the excise duties charged on mineral oils are governed by a Community system of minimum taxation, the rates of which have not, moreover, been revised since 1992. This leads to distortions between the different sources of energy and between the Member States.

In order to address this problem, the Commission is proposing that all energy products should be taxed and that the rates for hydrocarbons should be updated. This is intended to enable the Member States to pursue the tax reforms necessary to reduce the distortions of competition which exist in the internal market for energy.

In addition, the proposal gives the Member States the flexibility to differentiate the rates of taxation on the basis of environmental criteria, while complying with the minimum rates. It thus offers them the opportunity to make greater use of the taxation of energy products for environmental purposes.

The proposed Directive covers all energy products. Apart from the mineral oils already covered by excise duties, these are chiefly coal, natural gas and electricity. For all these products, with the exception of electricity, only their uses as motor fuel or heating fuel are taxed, and not their use as raw materials, nor in chemical reductions or for electrolysis. As regards electricity, the proposal for a Directive provides for the taxation of output at the final consumption stage. Member States are also authorized to refund to the producer the tax paid by the consumer where they wish to encourage the use of renewable energy sources.
DE FR
Follow us on: RSS Facebook Twitter YouTube Managed by the EU Publications Office Top