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Germany, EU Redesigning Energy Tax Rebate

Thursday, 20 February 2014   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas (Tax-News)

A quick resolution is expected in talks between Germany and the European Union concerning Germany's renewable energy tax rebate (EEG-Umlage) on offer to energy-intensive companies in Germany, the Federation of German Industry (BDI) has said.

The Commission is challenging the German tax concession on the grounds that it is a form of illegal state aid. German Economy and Energy Minister Sigmar Gabriel is engaged in talks with Brussels to redesign the tax break, to ensure that its provisions are in line with EU law. This may involve a reduction in the number of companies that may benefit from the exemption, Gabriel said.

The Federation of German Industry said that negotiations between Gabriel and European Union Commissioner for Competition Joaquin Almunia have so far been positive, but cautioned that a modified tax break should continue to preserve the interest of German industry, particularly those businesses facing fierce international competition. While there has been criticism of the need to review the tax break in Germany, the BDI has acknowledged that the EU is keen to foster the activities of energy-intensive companies as they act as a key growth driver in Europe.

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