A company that receives government support gains an advantage over its competitors.
What is State aid de minimis scheme?
As small amounts of aid are unlikely to distort competition, a useful approved EU mechanism for State aid is the industrial de minimis regulation which allows small amounts of aid, that is, less than €200,000 over three consecutive fiscal years, to a single undertaking for a wide range of purposes.
What is banned by the EU rules on State aid?
European Union law generally prohibits State aid to undertakings (Treaty on the Functioning of the European Union (TFEU), Article 107(1)). Public aid granted to an undertaking may give the company in question a selective financial advantage, which may distort competition and the functioning of the internal market.
What is de minimis aid?
De minimis aid indeed refers to small amounts of state aid to undertakings (essentially companies) that EU countries do not have to notify the European Commission about. The maximum amount is EUR 200 000 for each undertaking over a 3-year period.
How does state aid work?
State aid is any advantage granted by public authorities through state resources on a selective basis to any organisations that could potentially distort competition and trade in the European Union (EU). It is anything which an undertaking (an organisation engaged in economic activity) could not get on the open market.
What is state aid called now?
Subsidy
“Subsidy” is the new “state aid” – broadly the same meaning as the definition in Article 107 TFEU albeit using language which is more friendly to a common law legal system.
What is notified state aid?
Notified state aid is government funding that is regulated by the European Commission, in line with state aid rules. These rules limit how much financial aid each country gives domestic businesses in order to maintain a level playing field across the continent.
What is the de minimis state aid limit?
€200K
The de minimis regulation recognises that some State Aids are too insignificant in size to be a concern. The limit for de minimis is €200K over any rolling three year period for any one business.
Why is state aid prohibited?
In general, State aid is banned because of its anti-competitive effects. For example, without State aid rules Member States might engage in wasteful subsidy races, which are non-sustainable, or perfectly healthy companies might be put out of business because their competitors received unfair state subsidies.
Do EU State aid rules still apply in UK?
The EU State aid rules will no longer apply to most aid provided by government departments and other public authorities in England, Scotland and Wales, unless this relates to Northern Ireland companies and is within the scope of Article 10 of the Northern Ireland Protocol.
What is non notified state aid?
Non-notified state aid grants divide up a project into SME and RDEC components. For SMEs that have funded a project with non-notified state aid, only the proportion that was subsidised should go through the RDEC scheme. The remainder of the project costs can be claimed using the SME scheme.
How do I notify the European Commission of state aid?
State aid notification in the agricultural and forestry sectors and in rural areas A notification must be transmitted electronically via the Commission’s web notification application SANI. The forms are available in all official EU languages except Irish.
When does the Commission send a notice of receipt of aid?
Within 10 working days of receipt of that summary information, the Commission shall send to the Member State a notice of receipt with an identification number of the aid. The Commission will publish the summary information in its Competition case database.
How do I notify the European Commission of a competition case?
The Commission will publish the summary information in its Competition case database. A notification must be transmitted electronically via the Commission’s web notification application SANI. The forms are available in all official EU languages except Irish.
What is the EU doing about state aid?
Therefore the Treaty generally prohibits State aid unless it is justified by reasons of general economic development. To ensure that this prohibition is respected and exemptions are applied equally across the European Union, the European Commission is in charge of ensuring that State aid complies with EU rules.
