The European Commission has ordered France, Ireland and Italy to partially recover tax exemptions on energy products that constitute illegal State aid. Beginning in the 1990s, these three Member States provided tax breaks on mineral oil use in the production of alumina, which, in practice benefit only one company per Member State. In 2005, the Commission ordered a partial repayment of tax exemptions granted up until 2003, but extended its investigation into tax breaks granted from 2004, given the entry into force in that year of the Energy Tax Directive, 2003/EC/96. The Commission ultimately found that the post-2004 tax exemptions (i) fall outside the Directive’s scope, and (ii) constitute incompatible State aid. France, Ireland and Italy must now recover 20 per cent of the value of the exemptions granted since 1 January 2004.
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France, Ireland and Italy to partially recover energy product tax breaks
- McDermott Will & Emery
- European Union, France, Ireland, Italy
- February 16 2007
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