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European Commission probes tax exemption for German greenhouse producers

The European Commission recently opened a formal investigation procedure in respect of a German tax exemption in favour of greenhouse horticulture. The measure consists of a reduced rate of taxation applicable to heating fuel, methane and liquid gas used to heat greenhouses. This exemption, introduced in 2001 would appear to entail aid for German greenhouses of approximately EUR 15 million per year. At this stage, the Commission considers the tax exemption in favour of greenhouses to be an operating aid that is incompatible with the common market. The Commission intends to take a final decision within 18 months. As reported in an earlier issue of New Ag International, the Commission is currently investigating a similar tax exemption in favour of glasshouse horticulture in Italy. A final decision on the Italian case is expected in 2006.

Published 24th October 2005