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Brussels, 16 October 2008

Excise duties: the European Commission decides to bring Italy before the European Court of Justice for its tax legislation which favours regenerated lubricating oil produced from used oil collected in Italy

The European Commission has decided to bring Italy before the European Court of Justice regarding its tax legislation which discriminates against regenerated lubricating oil coming from other Member States and discourages Italian manufacturers from using used oil collected in other Member States in the regeneration process. Despite the Commission's request (IP/07/998) to ensure an equal treatment of domestic and foreign products in accordance with Article 90 of the EC Treaty, Italy has not taken timely action to extend the tax advantage granted only to lubricating oil made from used oil collected in Italy.

According to the Italian legislation lubricating oil and other mineral oil are subject to consumption tax when offered for sale or used in ways other than as motor fuel or heating fuel. Lubricating oil obtained by way of joint regeneration is taxed at a reduced level of 50% of the tax imposed on lubricating oil of primary distillation. This tax advantage, however, is granted only if the regeneration is processed with used oil collected on the Italian territory. These national rules resemble very much those already condemned by the Court in 1980 in the Case 21/79 Commission v the Italian republic.

The Commission believes that the Italian rules de facto favour regenerated oil manufactured in Italy and discriminates against regenerated oil collected or manufactured elsewhere in Europe. The Commission considers that those rules infringe Article 90 of the EC Treaty.

Italy claims that the national rules in question can be justified on the basis of environmental considerations as it serves as an incentive for producers to effectively collect used oil instead of leaving it untraced in the environment.

Such arguments do not appear to be acceptable nor were they accepted in 1980 by the Court. The Court ruled that extending the tax advantage, which was granted to domestic products, to similar imported products would not jeopardize the environmental objectives and that the requirement of origin was primarily directed against imported products, which were put at a disadvantage in comparison to domestic oil.

The Commission's reference number of the infringement procedure is 2004/2190.

For the press releases issued on infringement procedures in the taxation or customs area see:

For the latest general information on infringement measures against Member States see:

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