Tax Notes International

The European Court of Justice on October 25 ruled in Commission v. France (C-164/11) that France has failed to comply with Directive 2003/96/EC on the taxation of energy and electricity products.

The ECJ held that France did not adopt all the measures necessary to modify and adapt its electricity tax system during a transitional period that expired on January 1, 2009, and that it also missed a May 22, 2010, deadline set by the European Commission.


The EU Council of Ministers on October 27, 2003, adopted Directive 2003/96/EC (the energy tax directive), extending the scope of an EU minimum-rate system for energy products — which previously had been limited to mineral oils — to all energy products, including coal, natural gas, and electricity. The energy directive entered into force on January 1, 2004, but included a transitional period that gave France until January 1, 2009, to adapt its tax system.

The directive set minimum tax rates for motor fuel for consumer use, motor fuel for industrial or commercial use, heating fuel, and electricity. The tax level applied by the EU countries could not be lower than the minimum rates set in the directive.

On March 18, 2010, the European Commission asked France, in a reasoned opinion, to adapt its legislation on electricity taxation within two months to bring it into compliance with the energy tax directive. French authorities maintained that France had already adopted all the necessary measures in article 23 of Law 2010-1488 of December 7, 2010.

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Reprinted with permission from Tax Notes Int'l, November 12, 2012, p. 619