Browsing by Author "Tanskanen, Tuulia"

The aim of this dissertation is to examine when indirect environmental taxes are permissible under the rules concerning prohibited State aid in the European Union. The underlying motive is to clarify what types of environmental taxes national legislators in EU Member States can adopt without being restricted by State aid control. The method applied to the dissertation is traditional legal dogmatics, which is justified by the fact that this specific field of law has been only rarely been studied in legal literature. The focus of the dissertation is the cumulative criteria for State aid which must be notified the European Commission before being adopted. These criteria are defined in Article 107(1) in the Treaty of the Functioning of the European Union (TFEU). This dissertation clarifies how national indirect environmental taxes are assessed under the four criteria for State aid in Article 107(1) TFEU. In order to be considered as State aid which must be subjected to the notification procedure in the Commission, an environmental tax measure must favour certain undertakings, or the production of certain goods, be financed through public resources, distort or threatens to distort competition and affect trade between Member States. Applying the above criteria to national indirect environmental taxes proves that the assessment of the tax measures is rather strict when considering the Member States’ treaty-based competence in tax matters. On the other hand, the indirect nature of the taxes as well as the acceptable aims behind them can sometimes allow them to escape the definition of State aid as expressed in Article 107(1) TFEU. In many cases, private financing of an environmental aid is preferable to an environmental tax, since the former escapes the criterion of aid being granted through state resources. Furthermore, indirect environmental taxes may have less distortive effects than other aid measures, and therefore they can be more desirable when assessed in light of the objectives of State aid control. Therefore, it is recommendable that the legislators in the Member States take into consideration the strictness of the interpretation of State aid when introducing environmental tax measures. As a precaution, all such measures should be notified to the Commission. The notification can, however, be accepted by the Commission without imposing further conditions, if the tax falls outside the scope of Article 107(1) TFEU. It can therefore be wise to construct taxes so that they escape the definition of State aid control, even when the aid is being notified. The Commission’s approval brings certainty to the application of the tax, which is important when considering the long-term objectives of environmental policy.