Taxation Task Force
Fiscal issues
On the fiscal front UEIL is continuing its outreach activities on two key files, namely EMCS and the review of the Energy Taxation Directive.
Excise Movement and Control System (EMSC)
On the 18th of January 2013 an Excise Committee took place where Poland and Lithuania raised again their proposal to include lubes under Excise Movement and Control System (EMSC) - this was expected. During the meeting a majority of the new EU Member States supported the proposal of Poland and Lithuania.
Although there is still a blocking minority against this proposal within the Council, Germany underlined during the meeting there is a serious problem of fraud (not only in the new EU Member States, but also in Germany). Therefore more regional cooperation would not be a solution for the problem. This view was also supported by Austria.
This led to a discussion among EU Member States that a possible compromise solution could be to reduce the scope of the Polish/Lithuanian proposal by creating specific TARIC Codes, where the products with the highest fraud risk are clearly described, looking at the viscosity, density and flash-points This means indirectly that the German proposal to include light lubricants under EMCS is back on the table. According to the European Commission it is legally possible to do this under the current legislation.
Follow up process
The European Commission will start bilateral consultations with EU Member States in the coming months to examine if there is a QMV for the compromise proposal to narrow the scope of the Polish/Lithuanian proposal. If this is the case, then new discussions will start in FISCALIS in the second half of the year (we guaranteed that UEIL can be invited as experts to FISCALIS meetings like last year).
If there is no QMV for the proposal to narrow the scope of the Polish/Lithuanian proposal, then the European Commission and Presidency will urge Poland and Lithuania to redraw there proposal (everything will stay as it is).
At the next Excise Committee (probably in June 2013) the European Commission and Presidency will inform the EU Member States if there is a QMV to reduce the scope.
UEIL will actively pursue its outreach activities towards the EU Member States and the Commission.
Energy Taxation Directive
The European Commission’s proposal on the revision of the Energy Taxation Directive (with an inclusion of mandatory split of taxes into two parts – one related for CO2 emissions and one related to energy content) was discussed at the latest ECOFIN in January 2013.
Up till now EU Member States have found an agreement on the separation rate structure and the proportionality principle. Among EU Member States there is still large disagreement if the separation rate structure has to be mentioned in the actual text of the Directive or the Recitals and on the link with EU ETS, tax treatment of biofuels and tax on commercial diesel.
Concerning’s UEIL position to include lubricants inside the scope of the Energy Taxation Directive but with a specific exemption for products not used as heating or motor fuel (to create a level playing field for lubricants within the Internal Market), a large majority of the EU Member States is still supporting the Commission’s initial proposal (lubricants outside the scope of the Directive). Therefore UEIL will continue its active outreach activities towards the EU Member States in the coming months.
Timeline
Negotiations on the revision will continue under the Irish Presidency and probably the Lithuanian Presidency (1 July 2013).