When a Regressive Tax Regime Becomes a Selective Aid Measure – Some Practical Lessons from the Belgian Energy Sector on How (Not) to Act

The granting of State aid without prior approval by the Commission is unlawful and exposes the beneficiaries to possible recovery measures. However, it may be difficult to determine whether a measure constitutes State aid within the meaning of Article 107(1) TFEU. In the energy sector, a typical difficulty is in determining to what extent a regressive tax qualifies as a selective aid measure. In order to avoid all risk, it is best to notify the measure if there is any doubt as to its qualification. Although this seems a very simple rule of thumb, it is one that Member States very often fail to understand. Unfortunately, Belgium is no exception to that.