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PR(99)09: EFTA Surveillance Authority adopts guidelines on training aid and on the application of state aid rules to direct business taxation


The objective of the Authority's guidelines on training aid is inter alia to clarify which measures to promote training involve aid within the meaning of the EEA Agreement, to ensure consistency between the rules on training aid and those laid down for related types of aid, and to to increase the transparency of the approach which the Authority will follow in assessing whether measures constituting aid can nevertheless be approved as compatible with the Agreement.

The guidelines underline that many training measures fall outside the concept of State aid.  Only measures favouring one or more firms or sectors of industry by reducing the costs they would normally have to bear when they want their employees to acquire new skills can involve aid.

The assessment of the compatibility of training aid takes inter alia into account the transferability of the training, drawing distinction between general and specific training, and the favourable external effects on companies not directly receiving aid.

For general training, the Authority will approve aid up to 50% of eligible costs and 25% for specific training projects.  These levels are increased by 10 percentage points (specific training) and 20 points (general training) for SMEs and by 5 points for assisted areas under Article 61(3)(c) of the EEA Agreement.

The aim of the guidelines on application of State aid rules to measures relating to direct business taxation is to clarify which tax measures fall under the concept of State aid.

The guidelines take into account that, as a general rule, a tax system of an EFTA/EEA State is not covered by the EEA Agreement. However, in certain cases such a tax system may have consequences that would bring it within the scope of the state aid provisions of the EEA Agreement.  These provisions are identical in substance to those of the EC Treaty.  The notion of State aid deriving from the EEA Agreement must be interpreted in the same way throughout the EEA, also when the aid takes the form of tax measures.

In order to qualify as State aid, tax measures must meet the following conditions:  (1) They must confer an economic advantage on recipients which relieves them of charges normally borne from their budgets; (2) the advantage must be granted by the State or through State resources; (3) the measure must affect competition and trade between Contracting Parties; and (4) the measure must be specific or selective in that it favours 'certain undertakings or the production of certain goods'.

The guidelines develop a general framework for the assessment of these conditions.  They seek to clarify the distinction between State aid and general measures in this field.  They also indicate which measures are selective or specific enough to qualify as aid.  Thus, measures, to promote a certain region of a country represent aid.  Similarly, the guidelines provide that measures favouring certain industrial sectors represent aid.

The differential nature of some tax measures does not necessarily mean that they must be considered to be State aid.  This is the case with measures whose economic rationale makes them necessary to the smooth functioning and effectiveness of the tax system.  Examples of such cases include the progressive nature of an income tax scale, which is justified by the redistributive purpose of the tax system.

For further information please contact Mr. Amund Utne (tel. 286.18.50).


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