Global

Details

  • Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 7/10/2014

United Kingdom - “Marked fuel” taxation referred to CJEU 

July 10:  The European Commission today announced that it will refer the United Kingdom to the Court of Justice of the European Union (CJEU) for not properly applying the rules on fiscal marking on fuel.

Summary

Under EU excise tax rules, fuel that can benefit from a reduced tax rate has to be marked by coloured dye. Fishing vessels, for example, are allowed to benefit from a lower taxed fuel, but private leisure boats must use fuel subject to a standard rate.


Currently, UK law does not require fuel distributors to have two separate fuel tanks to distinguish between the lower tax marked fuel and the fuel subject to the standard rate. As a result, private leisure boat owners often can only purchase marked fuel. As a consequence, private leisure boats may not pay the right amount of tax because they purchase use fuel normally intended for fishing vessels—contrary to EU excise tax rules.


According to today’s EC release, the UK did not bring its excise tax rules into line with EU law following a May 2013 reasoned opinion—hence, the case is being referred to the CJEU.




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