Proposal for a Council Decision concerning the dock dues in the French outermost regions

The Treaty on the Functioning of the European Union (TFEU) applies to the outermost regions of the Union. The French outermost regions, however, are excluded from the territorial scope of the VAT and excise duty directives. The TFEU, in particular Article 110, does not in principle authorise any difference in the French outermost regions between the taxation of local products and the taxation of products from metropolitan France, the other Member States or non-member countries. Article 349 of the TFEU (former Article 229(2) of the EC Treaty), however, provides for the possibility of introducing specific measures for those regions because of the permanent handicaps which affect the economic and social conditions of the outermost regions. Such measures concern various policies, including taxation.

The 'dock dues' tax is an indirect tax applied to deliveries and exports of goods in the French outermost regions. In principle, it is applied in the same way to products produced locally and those that are not (products of metropolitan France, other Member States or non-member countries). However, Council Decision 2004/162/EC of 10 February 2004 (as amended by Council Decisions 2008/439/EC of 9 June 2008 and 448/2011/EU of 19 July 2011), adopted on the basis of Article 299(2) of the EC Treaty, authorised France, until 1 July 2014, to apply exemptions or reductions to the dock dues tax for certain products produced in the French outermost regions (excluding Saint Martin). The Annex to that Decision contains the list of products to which tax exemptions and reductions may be applied. The difference between the taxation of locally manufactured products and the taxation of other products may not exceed 10, 20 or 30 percentage points, depending on the product.

The purpose of these tax differentials is to offset the handicaps affecting the outermost regions, which increase production costs and therefore the cost price of products produced locally. Without specific measures, local products would be less competitive than those produced elsewhere, even taking into account the cost of transporting such goods. This would make it harder to maintain local production with higher production costs.

Council Decision 2014/162/EU of 11 March 2014 extended the application of Council Decision 2004/162/EC to Mayotte from 1 January 2014, the date on which Mayotte became an outermost region, and listed the products to which differentiated dock dues may be applied and the applicable limits. Lastly, to enable the Commission to finalise examination of the French request, Council Decision 378/2014/EU of 12 June 2014 extended the period of application of Council Decision 2004/162/EC by 6 months until 31 December 2014 instead of 1 July 2014.

The purpose of this proposal is to establish the legal framework for the dock dues from 1 January 2015 to 31 December 2020. It extends Decision 2004/162/EC by a further six months to give France time to transpose the provisions of the new Council Decision into its national law, and establishes the new legal framework applicable between 1 July 2015 and 31 December 2020.

• Primary Source

EUR-Lex: COM(2014)666: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2014:666:FIN

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