EU Resumes Farm Subsidy Payments to Slovenia
The European Commission has lifted a temporary blockade of farm subsidies to Slovenia, an EU spokesperson told the press in Brussels on Tuesday.
According to Michael Mann, the spokesperson for the European rural development commissioner, the European Commission has decided to lift the blockade of farm subsidies although it has not yet cleared Slovenia's income tax legislation as compatible with EU farm subsidy rules.
The EU halted farm subsidy payments to Slovenia in mid-June, citing concerns over withholding tax that is levied on farm subsidies in Slovenia.
Mann said that the Commission has not yet concluded whether Slovenia's income tax law indeed violates EU subsidy rules, which demand that the farmer be paid the full worth of the subsidy. However, he added the Commission did not want to hold back subsidies any longer in the interest of farmers.
According to him, three subsidies worth around EUR 60m that have been halted will now be paid out.
Mann added that Slovenia has been notified of the decision to lift the blockade. Meanwhile, the Commission is to continue examining Slovenia's income tax law.
Legal doubts remain and the Commission's legal service will continue to study the matter, Mann said, adding that the Commission could demand that wrongly used subsidies could be returned if the law were to be found in violation of EU subsidy rules.
The issue was first raised by the European Commission as early as May, when Slovenia had to answer whether the withholding tax was in line with EU regulations.
The Commission is primarily examining whether the Slovenian law affects the implementation of the Common Agriculture Policy - the tax aspect is in Slovenia's domain.
The Slovenian Finance Ministry has argued that the Slovenian income tax system is fulling in line with EU rules and added that tax regulations are in the domain of member states.
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