Austrians told energy tax reductions are illegal

Vienna has been told to scrap a scheme offering state aid to companies based on their energy consumption.

Commission v Austria

Energy Tax

The European Court of Justice has held that Austria acted unlawfully when it failed to notify the European Commission of its intention to introduce a scheme introducing state aid in 1996 to allow companies to benefit from tax reductions on natural gas and electricity consumption. This was the case despite the fact that the Commission later found the scheme to be compliant with European Union single market rules.

The Court's judgement makes clear that the last sentence of Article 88(3) EC is to be interpreted as meaning that it is up to the national courts to protect the rights of individuals against the possibility of national authorities disregarding the prohibition on putting into effect aid schemes without prior authorisation from the European Commission. In doing so, they must take fully into account the Community interest and must not adopt a measure simply extending the scope of the recipients of the aid.

The full text of the judgement is available at the following link.

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