Brussels, 10/07/2014 (Agence Europe) - On Wednesday 9 July, the European Commission decided that a series of reductions and exemptions from a Danish tax on non-nominative advertising material delivered to households was in line with EU state aid rules.
Denmark plans to introduce a tax on non-nominative advertising material delivered to households, as it is concerned by the large volume of waste paper generated by households. The tax amounts to DKK 4/kg (around €0.54). A reduced rate of DKK 2/kg applies to advertising material bearing the EU Ecolabel and three products are exempted, namely advertising material concerning societies covered by the Danish General Education Act; weekly newspapers with at least 25% editorial content; and telephone directories with at least 60% editorial content.
The Commission concluded that the reduced tax rate for advertising materials bearing the EU Ecolabel does not constitute state aid in the meaning of EU rules since it does not selectively favour specific companies. The Commission also found that the exemption for advertising material on activities in and from societies covered by the Danish General Education Act does not involve any state aid because it has no effect on trade between member states.
The Commission found that the tax exemptions for weekly newspapers and telephone directories are state aid because they are selective, but the positive impact of safeguarding the social role of weekly newspapers outweighs any potential distortions of competition triggered by the aid.
Initially, Denmark had notified two extra exemptions from the tax. However, one of these exemptions does not target advertising material and is therefore excluded from the scope of the measure. The Danish authorities agreed to waive the second one, after the Commission raised state aid concerns, having received several complaints from industry associations and companies. (EL)