Council Decision No 377/2014/EU of 12 June 2014 on the AIEM tax applicable in the Canary Islands

What it is

to authorise 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. 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 2002/546/EC authorised Spain, up to 30 June 2014, to apply exemptions from or reductions in the AIEM to certain products produced locally in the Canary Islands. The Annex to that Decision contains a list of products to which tax exemptions and reductions may be applied. The difference between the taxation of locally manufactured products and the taxation of other products may not exceed 5, 15 or 25 percentage points, depending on the product. The specific measures covered by Decision 2002/546/EC were designed to strengthen local industry by making it more competitive bearing in mind taking into account the remoteness, insularity, the predominance of tourism and the small share of industry in the Canary Islands’ GDP. The Committee on Regional Development adopted, in the framework of a special legislative procedure (Parliament consultation), the report by Danuta Maria HÜBNER (EPP, PL) on the proposal for a Council decision on the AIEM tax applicable in the Canary Islands. To recall, Council Decision 2002/546/EC authorises Spain, up to 30 June 2014, to apply exemptions from or reductions in the ‘Arbitrio sobre Importaciones y Entregas de Mercancías en las Islas Canarias’ (AIEM) to a number of products produced locally in the Canary Islands, in order to enhance competiveness and to compensate for the additional costs of production due to isolation, raw material and energy dependence, the obligation to build up stocks, the small size of the local market and the low level of export activity. On 4 March 2013, Spain requested the Commission to prepare a Council Decision authorising Spain to apply exemptions from or reductions in the AIEM to certain products produced locally in the Canary Islands for the period 2014-2020, modifying the list of products and the maximum rates applicable to some of them. The Commission found that it is justified to maintain the exemption of the AIEM to a list of locally produced industrial products. Given that this measure is intended at continuing to stimulate economic activity and competitiveness in an outermost region, without distorting the legal order of the Union, the committee proposed to that this proposal be adopted without amendment. The European Parliament adopted by 591 votes to 64, with 15 abstentions, in the framework of a special legislative procedure (Parliament’s consultation), a legislative resolution on the proposal for a Council decision on the AIEM tax applicable in the Canary Islands. Following its Committee on Regional Development, Parliament approved the Commission proposal which seeks to authorise the Spanish authorities to apply, until 31 December 2020, to certain products produced locally in the Canary Islands, exemptions from or reductions to the AIEM. These reductions should be included in the…

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