The correspondence dated May 23, 2014 discussing Article 177 of the July 2014 version of the law clearly agrees with the earlier assessment that tax exemptions are state aid. This "is state aid within the meaning of Article 107 of the TFEU [Treaty for the Functioning of the European Union]." They also note that the GBER or block exemption rule that the Government is relying upon to avoid notification does not cover the tax exemptions.
OCCP concluded in November 28, 2013:
“In this context, I wish to point out that the exemption from excise duty for RES energy in the Directive on the taxation of energy is optional, and hence the establishment of this type of release is not an obligation of a Member State, but the only element implemented by environmental policies. Bearing in mind that this exemption applies to public funds (depletes the proceeds of excise duty) is selective (only specific technologies are affected), is for the benefit of the beneficiaries (reduced costs associated with running business) and due to the competitive nature of the energy market and the EU dimension affects competition and trade in this market, it should be considered that it is state aid. (emphasis added) “
There is no real doubt about the law on this issue. “State resources are also involved in cases where tax revenues are foregone and where pecuniary advantages are acquired for an undertaking (could include debts deferred), even at no loss to the state. Tax advantages may take many forms including “permanent or temporary exemptions (fiscal holidays), tax credits, reduced tax rates, reduced taxable base, accelerated depreciation, favourable rules allowing loss carry-overs, deferment or rescheduling of fiscal debt, be it unilateral or by virtue of a transaction, other payment facilities, negligence in the collection of taxes, fiscal amnesty and, more generally, the attribution to the tax administration of a discretionary power that goes beyond the simple management of tax revenue by reference to objective criteria.” Cameron May Ltd, The EC State Aid Regime: Distortive Effects of State Aid on Competition Trade, 2006, p.76 See Commission Communication of 22 November 2006 to the Council, the European Parliament and the European Economic and Social Committee: "Towards a more effective use of tax incentives in favour of R&D" [COM(2006) 728 final.
|Saint Bernard's Bluff, Brown & Bigelow|
So besides the Green Certificates that the Commission has already informally indicated to Poland constitute state aid, the draft law now before the Parliamentary committee also includes state aid in the form of tax relief.
The announced decision not to notify the Commission of the new law in violation of the treaty provisions seems increasingly like a bluff. The alternative is too weird to contemplate.