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Changes to low value state aid rules

Monday January 20th, 2014

On 1 January 2014, two new measures relating to so-called “de minimis” state aid were introduced and will apply until 31 December 2020. David Hansom at Veale Wasbrough Vizards looks at the issues.

David Hansom

David Hansom

Regulation 1407/2013
This regulation replaces regulation 1998/2006. It provides the threshold below which financial assistance measures are deemed not to meet all the criteria of Article 107(1) of the Treaty on the Functioning of the European Union (TFEU), and so are exempt from the notification obligation under Article 108(3).

Notable points include:

  • the basic de minimis ceiling over any three-year fiscal period is unchanged at €200,000 (or €100,000 for road freight transport);
  • the rules do not apply to fishery and aquaculture sectors, primary agricultural production, processing and marketing of agricultural products, export-related activities, and aid contingent on use of domestic over imported goods;
  • de minimis aid is deemed granted at the moment the legal right to receive it is conferred on the undertaking; and
  • subsidised loans of up to €1 million may also benefit from the de minimis regulation if certain conditions are met.

The Commission consulted on the proposed changes in 2013. One of the key differences between the draft and final regulations is that aid granted to undertakings in difficulty is no longer excluded from the scope of the regulation. Secondly, the regulation stipulates that the date on which de minimis aid is deemed granted is irrespective of the date of payment of the de minimis aid to the undertaking.

The regulation also clarifies that de minimis aid which is not granted for or attributable to specific eligible costs may be cumulated with other state aid granted under a block exemption regulation or a decision adopted by the Commission.

Regulation 1408/2013: agricultural aid
This regulation replaces regulation 1535/2007 in relation to de minimis aid in the agriculture sector. Notably, the Commission has decided to raise the de minimis thresholds so that it will not be necessary to notify aid in the agricultural sector where its value does not exceed €15,000 (previously €7,500 ) per beneficiary over a period of three years or 1% (previously 0.75%) of the value of agricultural output established for each Member State.

The guidelines on state aid in the agriculture and forestry sector were due to expire by the end of 2013. However, the Commission is continuing to review these guidelines and has extended the application of the current regime until June 2014.

David Hansom


Twiter: @vwvlawfirm

LinkedIn: David Hansom

Gov Opps training partner PASS (Procurement Advice and Support Service) runs procurement training courses for both the public and private sector, including an Introduction to Public Procurement, Legal Impact on Public Procurement, The New EU Procurement Directive and Drafting a Compliant PQQ. For a full list of events, click HERE

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