Brussels, 12/11/2014 (Agence Europe) - On Monday 10 November, the Agriculture Council decided to postpone until December the examination of the Cypriot request to continue to allocate state aid to farmers in the form of a tax exemption applicable to fuels used for agricultural purposes.
According to a number of sources, an agreement seems possible at the Council to accede to the country's request, but it will take a bit of time to discuss it, particularly with the European Commission.
Cypriot farmers have seriously suffered from the financial crisis in the island, the drought and the Russian ban on agricultural products from the EU. Against this extremely tough backdrop, Cyprus would like to continue its tax exemption currently applicable to agricultural fuels.
The guidelines on state aid in the agricultural and forestry sector 2007-2013 provided the option to grant reduced rates of taxation and tax exemptions for agricultural products. Making use of this option, Cyprus has granted state aid since 2004 in the form of a tax exemption of this kind. However, the EU guidelines on state aid in the agricultural and forestry sector 2014-2020 no longer allow this possibility. The tax exemption in question was not repealed following the adoption of new EU guidelines and Cyprus would like it to be extended. At the Council, an extension of this kind would be possible only in the framework of the unanimous decision. (LC)