ANNOUNCEMENT 24 May 2010
In May 2010, the government of the Czech Republic announced a new support programme for agriculture.
NUMBER OF INTERVENTIONS
Letter from the EC to the Czech Republic, Brussels 20 July 2010
On 24 May 2010, the Czech authorities notified the EU about their intention to partially refund taxes on motor fuels used in the agricultural production. The scheme entered into force on 1 January 2010 and will last for 4 years.
"The scheme aims at supporting agricultural production by reducing production costs." (para. 6) This is done by providing a partial tax refund. The applied tax rate in the agricultural sector is EUR 172 per 1000 liters of motor fuel, while the normal rate is EUR 385 per 1000 liters. The yearly amount of funds allocated to this scheme isset at EUR 67 million.
The tax refund scheme will be applied with no differentiation meaning that all firms in the agricultural sector are eligible. (para. 18, Letter from the EC to the Czech Republic, Brussels 20 July 2010) The scheme is limited to "the energy products used as motor fuel for the purposes of primary agricultural production" (par. 19).
The EC concludes that: "The beneficiaries of the aid at issue operate in a highly competitive international market. The aid measure is thus capable of distorting competition and affecting trade between Member states." (para. 21)
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.