Proposal for a Council Implementing Decision authorising the United Kingdom to apply reduced levels of taxation to motor fuels consumed on the islands of the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly

Taxation of energy products and electricity in the Union is governed by Council Directive 2003/96/EC (the ‘Energy Taxation Directive’). Pursuant to Article 19(1) of the Directive the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce further exemptions or reductions in the level of taxation for specific policy considerations.

The objective of this proposal is to allow the United Kingdom of Great Britain and Northern Ireland (UK) to continue applying a reduced rate of excise duty on motor fuels (namely unleaded petrol and gas oil) in all the islands of the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde (all off the coast of Scotland), and the Isles of Scilly (off the south west coast of England). Higher prices in these areas are due to higher transport and distribution costs, and low population. The objective of the measure is to offer some mitigation against the high costs of motor fuels in the specified areas.

Council Implementing Decision 2011/776/EU authorised the United Kingdom to apply, until 30 October 2017, reduced levels of taxation to unleaded petrol and gas oil used as motor fuels in certain islands. By letter dated 16 September 2016 and additional information sent on 16 December 2016, the UK authorities asked the Commission to prolong the application of the reduced rate. The UK has requested for the reduction to be authorised for a period of six years, which is the maximum period indicated in Article 19(2) of the Directive.

The specific provisions of the proposal are:
1. The United Kingdom will be allowed to continue applying a reduced rate of excise duty on motor fuels (namely petrol and gas oil) in all the islands of the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde (all off the coast of Scotland), and the Isles of Scilly (off the south west coast of England).
2. The authorisation requested is granted with effect from 1 November 2017 for a period of six years, as requested by the United Kingdom.

Since the United Kingdom notified on 29 March 2017 its intention to leave the Union, pursuant to Article 50 of the Treaty on European Union, the Treaties will cease to apply to the United Kingdom from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification, unless the European Council, in agreement with the United Kingdom, decides to extend that period. As a consequence, and without prejudice to any provisions of the withdrawal agreement, this Council decision only applies until the United Kingdom ceases to be a Member State.

EUR-Lex: COM(2017)170: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2017:170:FIN

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