Italy: Reduction in excise tax on fuel in northeast region (CJEU judgment)

Italy: Reduction in excise tax on fuel in northeast

The Court of Justice for the European Union (CJEU) today dismissed an action filed by the European Commission against Italy, with the CJEU concluding that a reduction in excise tax (in the form of a refund of the amount of the excise tax) on fuel purchased by residents of Friuli-Venezia Giulia (an autonomous region located in the northeast of Italy and bordering Austria and Slovenia) did not constitute an infringement on the energy tax directive.

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The case is: Commission v. Italy, C-63/19 (14 January 2021)

According to a CJEU release [PDF 238 KB], Italy was previously authorized until the end of 2006 to reduce the rate of excise tax on vehicle fuel purchased on the territory of the Friuli-Venezia Giulia. The grant of that authority was intended to counteract the practice of residents of the region from going across the border and buying fuel for their vehicles at a better price in Slovenia.

After 2006, residents of the region continued to benefit from a reduction in the pump price of fuel, with service station operators granting reductions in the price of fuel. The regional administration subsequently refunded to the service station operators an amount equal to that of the price reductions granted.

The EC asserted that this regime resulted in an unauthorised reduction, in the form of a refund, of the excise taxes applicable to petrol and diesel sold to residents of the region and that this constituted an infringement of the energy tax directive (which in part establishes minimum excise tax rates to be applied by EU Member States). The EC filed an action against Italy.

Today, the CJEU dismissed the EC’s action.

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