Navigation path

Left navigation

Additional tools

Other available languages: FR

       In the Community farm sector, a number of Member States operate
       systems  of "parafiscal" charges as well as general systems  of
       taxes and social security contributions.
       "Parafiscal"  charges are charges levied by public  or  private
       agencies  on  the  production  of  marketing  of   agricultural
       products with a view to financing activities for the benefit of
       the sector as a whole.
       They  are  levied,  for example, in France,  by  the  Comites
       Interprofessionnels, in the Netherlands, by the Produktschappen
       and  in the United Kingdom, by the Milk Marketing  Boards.  The
       proceeds  are  used  for a wide variety of  purposes,  such  as
       quality  control,  advertising  and  promotion,  research   and
       training,  and  for  the running  of  agricultural  bodies  and
       welfare expenditure.
       The  economic effects of the measures financed by  "parafiscal"
       charges levied on agricultural products are far from negligible
       in  some Member States.  In the Netherlands, for  example,  the
       Produktschappen budget for 1986 is HFL 192 million.
       The amounts charged vary widely.  A large proportion is used to
       finance   national  aids.  The  Commission  is  examining   the
       question  of  the  compatibility with Community  law  of  these
       charges.  It   has   issued  new  guidelines   for   Commission
       intervention in this area so as to single out the charges which
       are incompatible with the rules of the Treaty and to put an end
       to  the  widespread  suspicion  generated  by  this  source  of
       financing.
       The  guidelines are attached.  In applying them the  Commission
       has  studied  a number of specific cases.  It  has  decided  to
       initiate the procedure provided for in Article 93 of the Treaty
       in  respect  of a series of aids financed out  of  "parafiscal"
       charges  granted by the Produkschappen in the  Netherlands.  On
       the  basis of the information available to it, it has not  been
       able   to  find  the  measures  applied  in   the   Netherlands
       compatible.
 
             GENERAL GUIDELINES CONCERNING "PARAFISCAL" CHARGES
       1.  Community   law  does  not  proscribe  the   principle   of
           "parafiscality"   itself   but   imposes   the    following
           restrictions on such charges:
           -   they must not be discriminatory (Articles 12 and 95  of
               the EEC
               Treaty)
           -   they must not finance activities which are contrary  to
               Community law (Articles 30-36 and 92 and 93 of the  EEC
               Treaty).
       2.  Without  prejudice  to the  prohibition  on  discrimination
           provided for in Articles 12 et seq. of the EEC Treaty,  the
           compatibility  of such charges, once they apply equally  to
           domestic  and  imported products, must be assessed  in  the
           light of the provisions of Article 95 of the EEC Treaty  on
           the one hand, and of the Agricultural rules on the other.
           (a) With  regard to compatibility under Article 95  of  the
               EEC  Treaty, this is to be evaluated on a  case-by-case
               basis  by  the  Commission  in  the  light  of  general
               evidence.  Measures financed out of income derived from
               the  charges must not benefit domestic products  solely
               or  predominantly, where the funds are derived  from  a
               levy on all products, both domestic and imported.
           (b) With regard to the compatibility with the  agricultural
               rules, the Commission considers:
               - that normally the reduction in income attributable to
               the imposition of a "parafiscal" charge is not as  such
               contrary  to  the provisions of  the  Treaty.  On  this
               point,  therefore, the Commission has adopted the  same
               approach  as  in  the case  of  adjustments  to  direct
               taxation;
               The  Commission  reserves  the  right  in   exceptional
               circumstances  to  challenge  the  compatibility  of  a
               "parafiscal" charge if it became evident that by virtue
               of its rate, duration or basis of assessment, a  member
               state  deliberately  intended  to  interfere  with  the
               Community objective of guaranteeing a particular income
               for  a category of farmers by means of  the  guaranteed
               prices  mechanism;  In carrying out such a  check,  the
               Commission will ignore very small charges.
               -  that a charge is incompatible with Community law  if
               its aim   is to:
               . finance market support measures where Community rules
                 have           introduced  a  comprehensive   support
                 system;
               . subsidize  exports,  in  particular   intra-Community
                 exports,  by  means of Community aids or  rebates  on
                 transport costs.
               . encourage  surplus production which the rules aim  at
                 controlling.
                                    - 3 -
               Conversely,  if  the Community rules do not  cover  the
               activity  in question because the Community  legislator
               has sought to safeguard the freedom of action of Member
               States  or  has  been unable to  adopt  the  provisions
               originally  planned, the "parafiscal" charge is not  in
               principle  incompatible  with the  agricultural  rules.
               Thus,  such  charges  may be  admissible  if  they  are
               intended   to  improve  product   quality,   facilitate
               research or training, and so on.
       3.  Monitoring of "parafiscal" charges by the Commission
           The Commission will ask all Member States, on the basis  of
           Article  5  of  the  Treaty,  to  send  a  list  of   their
           agricultural "parafiscal"charges, giving details, for  each
           product,  of the rate, yield, taxable persons, purpose  and
           the latest budget of the agency on whose behalf the  charge
           is made.
           The  information will enable the Commission to examine  the
           aids financed at present out of such charges.  For  charges
           the  proceeds of which are intended to finance State  aids,
           the  Member States will be required under Article 93(3)  of
           the  Treaty  to inform the Commission of their  aid  plans.
           The Commission has decided to oppose the implementation  of
           aids which may be contrary to Article 95 of the EEC  Treaty
           or which would be incompatible with the agricultural  rules
           in the light of the criteria set out at point 2 above.
           It  will  be  recalled that Article 95  of  the  Treaty  is
           directly applicable and consequently establishes rights for
           third  parties,  who may avail themselves  thereof  in  the
           national courts.
 
           later  stage, the Commission may initiate at any  time  the
           procedure provided for in Article 169 of the EEC Treaty.
        
        

Side Bar