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European Commission - Press release

Octroi de mer: Businesses in French outermost regions of the EU to benefit from updated rules for tax reductions on local products

Brussels, 13 December 2018

New rules proposed by the Commission today would allow more local products to benefit from tax exemptions or reductions in the EU outermost regions of Guadeloupe, French Guiana, Martinique and La Réunion.

The measures announced today aim to encourage economic activity and safeguard the competitiveness of local products on these French outermost regions. Increased foreign competition can threaten the existence of local companies. Offering a wider range of exemptions and reduced rates for a specific, locally applied tax known as octroi de mer(or ‘dock dues')will allow local businesses to compete more effectively.

 

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "Taxation rules in the French outermost regions need to take into account the increased exposure of local products to foreign competition which can have a devastating effect on local companies. Today's initiative will help local industry to thrive in an area which has faced one of the highest unemployment rates in the EU, with young people in particular being hardest hit."

 

New products such as certain fruits and vegetables in Guadeloupe and Martinique, and certain wooden furniture in French Guiana would become exempt from the tax under the proposals. For certain products, such as some fertilisers in Guadeloupe and certain paints and varnishes in La Réunion, the authorised difference in taxation levels between locally produced goods and their foreign produced equivalents would increase to the benefit of the local economy.

 

Next steps

Today's proposed update will now be forwarded to Member States in the Council for agreement and to the European Parliament for consultation. The Commission will also proceed to fully review the original Decision granting the French outermost regions the right to allow differentiated taxation for certain products, in advance of a possible renewal of the octroi de mer scheme. Any renewal of the measures should be launched before end of 2020. This review will take place in the context of the Commission's Better Regulation Agenda.  

 

Background

Octroi de mer, or dock dues, are a type of tax imposed on products imported into or produced in the French outermost regions of Martinique, Guadeloupe, French Guiana, La Réunion and Mayotte. Octroi de mer is a very old form of tax, having been in place for several centuries. It was originally levied on all products arriving in the French overseas departments by sea.

 

While EU rules do not usually allow differences in taxation between local products and products imported from mainland France or the other Member States, measures are in place to take account of the specific characteristics and constraints of the outermost regions as recognised by article 349 TFEU, particularly when it comes to taxation. Specific EU legislation (Council Decision 940/2014/EU) authorises France to apply exemptions or reductions to the dock dues for products manufactured locally in the French overseas departments from 1 July 2015 to 31 December 2020.

 

The new measures are concrete examples of the Juncker Commission's commitment to providing tailored support to the outermost regions, to help them overcome specific constraints such as isolation, insularity and dependence on a few products, to create opportunities for their populations and to help these regions hold their own in a globalised economy. The Commission adopted a Strategy for the outermost regions in 2017 and has recently presented a new series of initiatives to further support these regions, a year on.

 

For More Information

Octroi de mer on the DG TAXUD website

IP/18/6770

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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