The National Rally (Rassemblement national), a French political party, is pushing for a reduction in the value-added tax (VAT) on fuels from 20% to 5.5%. They argue this would lower fuel prices, which have risen sharply in recent months. However, this proposal is seen as violating European Union (EU) law. Despite the French government introducing a series of measures on September 22 and 23 to help individuals and businesses that rely heavily on vehicles, the National Rally continues to advocate for the VAT cut. Thomas Ménagé, a National Rally deputy, said the party has been proposing this measure for five years. Marine Le Pen, the party's presidential candidate, reiterated the call during an interview, while Jordan Bardella, the party’s leader, claimed that other European countries have also reduced fuel taxes.
Under EU law, specifically the 2006 directive on the common system of VAT, member states must apply a "standard rate" of at least 15%. This rate applies to most goods and services, with some exceptions listed in the directive. Fuels, however, are not among the exceptions, meaning they must be taxed at the standard rate or higher. France's current 20% VAT on fuel aligns with neighboring countries like Germany (19%), Spain and Belgium (21%), and Italy (22%).
While France could, in theory, lower the VAT on fuels to 15%, this would require applying the same rate to other products that are not eligible for reduced VAT, such as clothing, furniture, cars, and electronics. This change could lead to a significant loss in revenue for the French government, estimated in the billions of euros.
Jordan Bardella suggested that some European countries might have broken EU rules by lowering fuel VAT. In 2022, Poland reduced its fuel VAT from 23% to 8%, and Spain temporarily cut it from 21% to 10% in 2026 in response to the Middle East crisis. However, the European Commission warned both countries through letters that these reductions were not allowed under EU law. Although no legal action was taken, the Commission noted that such VAT cuts are less effective than excise duties in addressing energy crises. If a country repeatedly violates EU laws, the Commission may start an infringement procedure, which could lead to legal action before the Court of Justice of the European Union and financial penalties.
French Party Proposes Fuel VAT Cut Amid European Law Constraints
AI-rewritten from original reportingHow it works
fuel-vatnational-rallyeu-lawfranceeconomic-policytax-reform



