Economic Policy and Infrastructure

Taxes and Import Duties

The coalition agreement between the political parties CDU, CSU and SPD contains no major tax-policy plans for the 18th parliamentary session (2013 to 2017). Instead of structural tax reforms, the coalition is concentrating principally on maintaining the status quo and safe-guarding its tax revenue.

Customs and purchase taxes

Customs duties, macroeconomic conditions and purchase taxes play a key role for the automotive industry as the most important German export industry. In the interest of competitive foreign trade, VDA champions simple customs and export regulations and a reduction of customs tariff barriers.

Energy taxes: Simplification regarding the obligation to provide supporting documents for the peak tax balance scheme

Under certain conditions, manufacturing companies can enjoy tax relief for energy taxes. Since 2013, this so-called peak tax balance scheme is however only possible if the companies can provide evidence that they are improving their energy efficiency. The VDA member companies feared that this condition could mean a disproportionate administrative expense. The VDA lobbied for a simplification. Subsequently, the Federal Ministry for Economic Affairs and Energy, in consultation with the Federal Ministry of Finance, largely approved this simplification suggestion. According to the new “Ordinance on the Amendment to the Efficient System Ordinance for the Peak Tax Balance Scheme (SpaEfV)” issued on October 31, 2014, 100 percent of the energy consumption of all sites and properties need now no longer be submitted to provide evidence of energy efficiency. In order to receive a reimbursement of energy and electricity taxes as part of the peak tax balance scheme, it is now sufficient for the majority of a large company (95 percent of total energy consumption) to have an energy or environmental management system. Large companies no longer need to provide evidence of energy efficiency for all of their branches. It can be assumed that companies can now acquire the energy management system certification required from 2015 without disproportionate costs.

Revision of the EU Energy Tax Guideline

As early as 2011, the European Commission already presented its first proposal for an update of the Energy Tax Guideline. Since then, new proposals were made repeatedly. Whereas the Energy Tax Guideline in its current version from 2003 provided the bases for an EU-wide harmonization of minimum taxes for electricity and energy products, the new guideline draft pursues the aim of implementing the 2020 EU targets regarding energy efficiency, climate protection and renewable energies. In terms of content, the EU Commission continues to strive for an agreement regarding minimum tax rates. The equivalence principle, which would have led to an increase in the diesel tax rate, will however not be pursued further. A drastic increase in the minimum rate for natural gas as a fuel will also not be implemented. A revision of the EU Energy Tax Guideline is currently postponed until the member states can reach an agreement regarding the disputed items.

Export controls – Russia sanctions

Effective on August 1, 2014, the EU issued far-reaching economic sanctions against Russia. As part of these sanctions, the EU published a list of goods, that may no longer be delivered to Russia directly or indirectly without the prior approval of the Federal Office of Economics and Export Control (BAFA). These requirements have far-reaching consequences for the automotive industry: Some products of the automotive industry may not be exported without approval. As a result, manufacturers and suppliers have asked the VDA for help, and the VDA is asking for a quick solution in direct contact with the Federal Office of Economics and Export Control (BAFA) and the Federal Ministry for Economic Affairs and Energy (BMWi) in order to prevent undesired ancillary effects on exports beyond the sanction objective. A remedy was then found in the short term. The approval process for companies was shortened significantly. In the future, the VDA wants to increasingly focus on the topic of export controls in order to support future developments in this area early on.

TTIP: Preferential rules of origin in the free trade agreement between the EU and the USA

The preferential rules of origin are playing a key role in the negotiations regarding a free trade agreement between the European Union and the United States of America with the aim of reducing current customs tariff barriers. The German automotive industry welcomes the TTIP negotiations, because the planned reduction in customs tariff barriers and non-tariff trade barriers would allow for the free traffic of goods between the two negotiating partners and would provide the required incentives for sustainable economic growth. In terms of the preferential rules of origin to determine reduced customs duties on the import of goods, rules so far contain significant differences: The EU applies the value chain method, whereas the USA uses the manufacturing cost method. In its statements to politicians and the administration, the VDA has expressed a preference for giving companies the choice between applying the EU’s value chain method or the USA’s manufacturing cost method. This choice allows companies to freely select their preferred calculation method and to continue with the calculation methods with which they are familiar. In addition, internationally trading companies have the option to harmonize processes and IT-supported calculation systems for all company sites in the EU and the USA. However, a condition for this is that the determination of the preferential source of goods leads to roughly similar results based on both sets of rules. Goods must therefore reach the same preferential status based on both calculation methods. For this purpose, a transfer mechanism is required, which would harmonize both sets of rules and whose design the VDA is currently developing internally.

Modernization of the Customs Code (UZK)

In 2012, the EU Commission issued a proposal to modernize the European Union’s Customs Code (UZK), which the European Parliament agreed on September 11, 2013. This Customs Code is to become applicable from May 2016 after the required detailed regulations are issued. As part of the agreement of numerous delegated legal acts, the VDA is lobbying for economic framework conditions, which are favorable for the automotive industry.

Fuel additives – simplification regarding evidence of transport

Effective on January 1, 2013, additive used as fuel additives were included in the application of the control and transport provisions of the European Commission Guideline 2008/118/EC. In practice, this regulation results in a significant administrative burden for deliveries of low quantities to other member states – both for the participating companies and for customs administration. In order to achieve a relief, the VDA has held talks with the Federal Ministry of Finance and in the interest of reducing bureaucracy has pleaded in favor of excluding deliveries of low quantities from the scope of the EU guideline. A concrete simplification proposal was submitted, which is supported by the Federal Ministry of Finance, and which it presented to the EU Commission’s purchase tax committee.

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