On April 25, 2022 EU Commissioner for Economy, Paolo Gentiloni, provided further guidance to Member States in the area of energy taxation by clarifying the applicable rules under EU law in a letter that was sent to all EU Finance Ministers. The guidance regards the possibilities to cushion the impact of high energy prices on households and businesses, in particularly those most vulnerable, while also avoiding supply disruptions.

The guidance highlights in particular the possibilities for reduced rates applicable under the EU’s VAT rules (the VAT Directive) and excise duty framework (the Energy Taxation Directive). In his letter, the Commissioner also recalls a number of key principles that should guide action in this field - notably, the effectiveness, consistency and equity of policy measures.

The letter of EU Commissioner Paolo Gentiloni can be found here.

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