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Council Directive 2003/96/ECShow full title

Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (Text with EEA relevance)

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Article 15

1.Without prejudice to other Community provisions, Member States may apply under fiscal control total or partial exemptions or reductions in the level of taxation to:

(a)

taxable products used under fiscal control in the field of pilot projects for the technological development of more environmentally-friendly products or in relation to fuels from renewable resources;

(b)

electricity:

  • of solar, wind, wave, tidal or geothermal origin;

  • of hydraulic origin produced in hydroelectric installations;

  • generated from biomass or from products produced from biomass;

  • generated from methane emitted by abandoned coalmines;

  • generated from fuel cells;

(c)

energy products and electricity used for combined heat and power generation;

(d)

electricity produced from combined heat and power generation, provided that the combined generators are environmentally friendly. Member States may apply national definitions of ‘environmentally-friendly’ (or high efficiency) cogeneration production until the Council, on the basis of a report and a proposal from the Commission, unanimously adopts a common definition;

(e)

energy products and electricity used for the carriage of goods and passengers by rail, metro, tram and trolley bus;

(f)

energy products supplied for use as fuel for navigation on inland waterways (including fishing) other than in private pleasure craft, and electricity produced on board a craft;

(g)

natural gas in Member States in which the share of natural gas in final energy consumption was less than 15 % in 2000;

The total or partial exemptions or reductions may apply for a maximum period of ten years after the entry into force of this Directive or until the national share of natural gas in final energy consumption reaches 25 %, whichever is the sooner. However, as soon as the national share of natural gas in final energy consumption reaches 20 %, the Member States concerned shall apply a strictly positive level of taxation, which shall increase on a yearly basis in order to reach at least the minimum rate at the end of the period referred to above.

The United Kingdom of Great Britain and Northern Ireland may apply the total or partial exemptions or reductions for natural gas separately for Northern Ireland;

(h)

electricity, natural gas, coal and solid fuels used by households and/or by organisations recognised as charitable by the Member State concerned. In the case of such charitable organisations, Member States may confine the exemption or reduction to use for the purpose of non-business activities. Where mixed use takes place, taxation shall apply in proportion to each type of use. If a use is insignificant, it may be treated as nil;

(i)

natural gas and LPG used as propellants;

(j)

motor fuels used in the field of the manufacture, development, testing and maintenance of aircraft and ships;

(k)

motor fuels used for dredging operations in navigable waterways and in ports;

(l)

products falling within CN code 2705 used for heating purposes.

2.Member States may also refund to the producer some or all of the amount of tax paid by the consumer on electricity produced from products specified in paragraph 1(b).

3.Member States may apply a level of taxation down to zero to energy products and electricity used for agricultural, horticultural or piscicultural works, and in forestry.

On the basis of a proposal from the Commission, the Council shall before 1 January 2008 examine if the possibility of applying a level of taxation down to zero shall be repealed.

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