Energy Tax Rebate: Limitation on Production Enterprises infringes EU Law

In a current case the ECJ had to decide whether the limitation of the Austrian energy tax rebate (ETR) to production enterprises was contrary EU law (ECJ 21 July 2016, C-493/14, Dilly’s Wellnesshotel GmbH). In its judgement the ECJ confirmed the infringement of EU lawIn consequence of this decision, Austrian service providers may now enforce their claims relating to the past.


If a reduction in environmental taxes – such as the Austrian ETR – is only granted to a certain group of taxpayers (e.g. only production enterprises), this measure would be considered a state aid. EU law requires basically every state aid to be notified with the EU Commission. The respective member state must not grant such state aid until the Commission’s (explicit or implied) approval. There are so-called Block Exemption Regulations (“GVO”) that state a simpler notification process for certain categories of state aid compatible with the common market, such as reductions in environmental taxes. After filing a planned state aid measure, the Commission’s approval can be implied in such cases if the Commission does not explicitly approve or disapprove within a certain period of time. For the simplification to be applicable, all material and formal conditions have to be met. In case mistakes occur in this process, EU law can be infringed.

Initial situation.

The Austrian legislator intended to limit the ETR to production enterprises from 2011 onwards (in preceding years also service providers were entitled to claim the ETR). In view of the simplified notification process according to the relevant GVO, a formal notification was not filed with the Commission. The claimant in the present case, a hotel operator and therefore a service provider, filed an ETR for the entire year 2011. The tax court of appeals (“BFG”) referred the case to the ECJ whether an infringement of EU law was committed in the course of amending Austrian law.

Judgement of the ECJ.

In its decision the ECJ follows the opinion of the Advocate General. The court confirmed that considerable mistakes were made with regards to formal conditions of the simplified notification. According to the ECJ, the rules on the simplified notification process are to be interpreted in a narrow sense in order to ensure that transparency requirements for state aid are met. Only through this formal approach it could be guaranteed that the Commission can review and third parties can exercise their procedural rights regarding state aid provisions. Due to the formal mistakes the simplified notification process according to the GVO was not applicable. Therefore the Commission did not approve the introduction of this state aid in 2011.


The Austrian legislator has tied the amendment’s entering into force to the Commission’s approval (Sec 4 para 7 of the Law on the rebate of energy taxes). As the ECJ has confirmed that this approval was not obtained, the amendment never entered into force. Hence service providers that have not yet applied for an ETR in 2011 and the following years or whose applications are still pending have the possibility to assert their claims. It is, however, necessary to bear in mind that a new GVO entered into force on 1 January 2015 which required a new notification of the aid regulation. In the present case Austria stated that the new notification based on the revised GVO could remedy the shortcomings of the notification in 2011. The ECJ stated that the new notification could not compensate failures of the past. Nevertheless, the ECJ did not explain whether the new application fully complies with all conditions of the simplified notification process which could have led to the limitation of the ETR on production enterprises being effective from 2015 onwards.

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Andreas Kapferer

Andreas Kapferer

Partner | Deloitte Tirol | Telefon: +43 512 58 2555-23 | E-Mail senden

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