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IP/10/1243

Brussels, 30 September 2010

Excise duty: Commission requests Latvia to amend discriminatory rules on bio-fuel from other Member States

The European Commission has requested Latvia to amend its legislation so as to no longer discriminate against bio-fuel from other EU Member States. Latvian law grants a lower rate of excise duty only for bio-fuel blended on Latvian territory. The Commission takes the view that such discriminatory treatment is in breach of EU rules that prohibit tax discrimination against products from other Member States (Article 110 of the Treaty on the Functioning of the European Union - TFEU). The request takes the form of a 'reasoned opinion' under EU infringement procedures. In the absence of a satisfactory response within two months, the Commission may refer Latvia to the EU's Court of Justice.

The Commission considers that the higher rate of excise duty applied to bio-fuels from other Member States gives an unfair advantage to bio-fuels blended in Latvia to the detriment of bio-fuels blended in other Member States. Latvia has claimed that a higher rate of excise duty on bio-fuel from other Member States is necessary to ensure bio-fuel quality and to protect consumers. However, the Commission does not consider that the tax measures in question are necessary to address either of these concerns.

The effect of such tax discrimination against bio-fuels from other Member States is to create a trade barrier within the EU's Single Market, penalising manufacturers in other Member States and depriving Latvian consumers of a broader choice of bio-fuel products.

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

http://ec.europa.eu/taxation_customs/common/infringements/infringement_cases/index_en.htm

For the most up-to-date general information on the infringement proceedings initiated against Member States, see:

http://ec.europa.eu/community_law/index_en.htm

For more information on EU infringement procedures, see MEMO/10/457


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