Progress: Awaiting final decision
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | REGI | OMARJEE Younous ( GUE/NGL) | GARCÍA MUÑOZ Isabel ( S&D), ALFONSI François ( Verts/ALE) |
Committee Opinion | PECH | ||
Committee Opinion | ECON |
Lead committee dossier:
Legal Basis:
TFEU 349-p1sub1-as1
Legal Basis:
TFEU 349-p1sub1-as1Subjects
Events
The European Parliament adopted by 681 votes to 5, with 3 abstentions, (following a special legislative procedure - consultation), a legislative resolution on the proposal for a Council decision on the AIEM tax applicable in the Canary Islands.
Parliament approved the Commission proposal without amendment.
The proposal authorises the Spanish authorities to provide, until 31 December 2027, for partial or total exemptions for locally manufactured products from the tax known as ‘Arbitrio sobre Importaciones y Entregas de Mercancías en las Islas Canarias’ (AIEM), a tax on goods in the Canary Islands. The special AIEM tax scheme aims to support local producers by reducing the competitiveness gap between local products and products manufactured outside the Canary Islands which results from the additional production costs linked to the permanent constraints affecting these islands.
The categories of products eligible for these exemptions are listed in Annex I, by reference to the EU nomenclature. However, it is for the Spanish authorities to determine the list of specific local products concerned and the level of exemption granted in each case, within the limits of the exemption decision. The proposal sets out the following three selection criteria for the purposes of this Decision:
- the existence of local production with a share of the local market of not less than 5%;
- the existence of significant imports of goods which could jeopardise the maintenance of local production, the share of such imports on the local market being at least 10%;
- and the existence of additional costs of local production that jeopardise the competitiveness of products produced locally.
Limited exceptions from these criteria are possible, for example to ensure local food security and medical supplies.
The proposal obliges Spain to: (i) provide the list of exempted goods to the Commission and inform it of any changes to it; (ii) submit reports on the implementation and impact of the derogation for each category of exempted goods.
PURPOSE: to establish the legal framework for the AIEM tax applicable in the Canary Islands from 1 January 2020 to 31 December 2027.
PROPOSED ACT: Council Decision.
ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.
BACKGROUND: Council Decision No 377/2014/EU authorises Spain, to apply exemptions from or reductions in the ‘Arbitrio sobre Importaciones y Entregas de Mercancías en las Islas Canarias’ (‘AIEM’) to certain products produced locally in the Canary Islands until 31 December 2020. The Annex to that Decision contains a list of products to which tax exemptions and reductions may be applied.
The rationale of the AIEM special regime is to support local products by reducing the competitiveness gap of local products against goods produced outside the islands caused by additional production costs as a result of the permanent constraints affecting the Canary Islands.
On 24 April 2019, Spain submitted a request to the Commission to extend the period of application of Decision No 377/2014/EU. Based on that study, the Commission considers that it is justified to grant the requested extension, with some amendments to the existing regime.
CONTENT: the proposal concerns a Council Decision to replace the current Council Decision No 377/2014/EU. It authorises the Spanish authorities to provide, until 31 December 2027 and in respect of products falling within the categories listed in Annex I of the Decision and manufactured locally in the Canary Islands, total exemptions or partial reductions of the tax known as AIEM. These exemptions must form part of the economic and social development strategy of the Canary Islands and must contribute to the promotion of local activities.
Revision of criteria for the identification of eligible products
The proposed Decision indicates only the eligible product categories (CN4), while specific products (CN8 or higher) are detailed by national authorities in their legal and administrative frameworks. The Spanish authorities have requested that 99 product categories of the Harmonized System (HS) Headings, according to the four digits of the Combined Nomenclature, should benefit from this measure. The Commission agrees with the list in Annex I as these products categories comply with the eligibility criteria.
The products are selected based on the following criteria:
- that local production exists and its share of the local market accounts for no less than 5%;
- that significant importation of goods (including from mainland Spain and other Member States) exists that could jeopardise the continuation of local production, and its share of the local market accounts for at least 10%;
- that additional costs exist which increase the cost price of local production in comparison with products produced elsewhere, compromising the competitiveness of products produced locally.
The market share thresholds can be derogated from in duly justified circumstances, which include: (i) labour-intensive production; (ii) production otherwise strategic for local development; (iii) production subject to periodical fluctuations; (iv) production located in particularly disadvantaged areas; (v) production of medical products and personal protective equipment required to address health crises.
Revision of the mechanisms to establish the maximum permitted differential
The revised regime intends to simplify the arrangements regarding the establishment of tax differential, replacing the current four different product lists with only one list. The maximum differential rate, which may be applied to the industrial products in question, is 15 %. In keeping with the principle of subsidiarity, the Spanish authorities shall decide upon the appropriate percentage for each product. The authorised tax differential shall not exceed the proven additional costs. Nevertheless, this fiscal advantage shall apply subject to a limit of EUR 150 million per annum, save in duly justifiable cases.
Monitoring and evaluation
No later than 1 January 2021, the Spanish authorities shall communicate to the Commission the initial list of products to which exemptions or reductions apply.
In order to enable the Commission to assess whether the conditions justifying the authorisation continue to be fulfilled, Spain shall submit a follow-up report to the Commission by 30 September 2025 at the latest.
This report shall include the following elements: (i) information on additional costs involved in the production; (ii) economic distortions and market impacts; (iii) information to assess effectiveness, efficiency and coherence with other EU policies; (iv) information on the continued relevance and EU added value of the legislation.
Documents
- Decision by Parliament, 1st reading/single reading: T9-0246/2020
- Committee report tabled for plenary, 1st reading/single reading: A9-0157/2020
- Committee report tabled for plenary, 1st reading/single reading: A9-0157/2020
- Committee draft report: PE655.929
- Legislative proposal published: COM(2020)0355
- Legislative proposal published: EUR-Lex
- Committee draft report: PE655.929
- Committee report tabled for plenary, 1st reading/single reading: A9-0157/2020
Votes
A9-0157/2020 - Younous Omarjee - Vote unique #
History
(these mark the time of scraping, not the official date of the change)
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