Legal Limits on Sector-Specific Resource Taxation in the EU/EEA - A Case Study of Aquaculture Taxation
(2025) HARN60 20251Department of Business Law
- Abstract
- This thesis examines the legal constraints imposed by EU and EEA law on the design and implementation of sector-specific resource taxation, using the aquaculture regimes of Iceland and Norway as reference models. Focusing on direct taxation, the analysis assesses compatibility with internal market freedoms and the State aid prohibition under Articles 28, 49, 63, and 107 TFEU and their EEA counterparts. The Icelandic regime, which applies a volumetric tax on marine-based aquaculture and grants production method-based reliefs, is found to fall outside the scope of internal market restrictions but raises significant concerns under State aid law. In particular, the reliefs constitute a selective advantage not justified by the tax system’s... (More)
- This thesis examines the legal constraints imposed by EU and EEA law on the design and implementation of sector-specific resource taxation, using the aquaculture regimes of Iceland and Norway as reference models. Focusing on direct taxation, the analysis assesses compatibility with internal market freedoms and the State aid prohibition under Articles 28, 49, 63, and 107 TFEU and their EEA counterparts. The Icelandic regime, which applies a volumetric tax on marine-based aquaculture and grants production method-based reliefs, is found to fall outside the scope of internal market restrictions but raises significant concerns under State aid law. In particular, the reliefs constitute a selective advantage not justified by the tax system’s internal logic, failing the compatibility conditions under Article 107(3)(c) TFEU. In contrast, Norway’s profit-based tax applies uniformly, avoids selective reliefs, and aligns more closely with the proportionality and coherence requirements of EU law.
The findings demonstrate that while resource rent taxation is a legitimate fiscal tool, its legal compatibility under EU/EEA law depends on structural neutrality, the absence of unjustified differentiation, and demonstrable alignment between relief mechanisms and the tax system’s purpose. The analysis confirms that sector-specific tax regimes must be assessed not merely by their stated objectives, but by their legal design, effects, and internal justification. State aid rules, in particular, require that any differentiation within a tax framework must be inherent to the system and proportionate to the objective pursued. This thesis contributes to the understanding of how environmental or resource-targeted taxation must be structured to comply with the legal boundaries of the internal market. It underscores the need for legally coherent integration of fiscal and policy objectives to design future sectoral tax measures. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9192041
- author
- Arnarson, Ægir Örn LU
- supervisor
- organization
- course
- HARN60 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- sector-specific taxation, internal market, State aid, aquaculture, resource rent, EU law, EEA law, environmental taxation
- language
- English
- id
- 9192041
- date added to LUP
- 2025-06-03 13:04:47
- date last changed
- 2025-06-03 13:04:47
@misc{9192041,
abstract = {{This thesis examines the legal constraints imposed by EU and EEA law on the design and implementation of sector-specific resource taxation, using the aquaculture regimes of Iceland and Norway as reference models. Focusing on direct taxation, the analysis assesses compatibility with internal market freedoms and the State aid prohibition under Articles 28, 49, 63, and 107 TFEU and their EEA counterparts. The Icelandic regime, which applies a volumetric tax on marine-based aquaculture and grants production method-based reliefs, is found to fall outside the scope of internal market restrictions but raises significant concerns under State aid law. In particular, the reliefs constitute a selective advantage not justified by the tax system’s internal logic, failing the compatibility conditions under Article 107(3)(c) TFEU. In contrast, Norway’s profit-based tax applies uniformly, avoids selective reliefs, and aligns more closely with the proportionality and coherence requirements of EU law.
The findings demonstrate that while resource rent taxation is a legitimate fiscal tool, its legal compatibility under EU/EEA law depends on structural neutrality, the absence of unjustified differentiation, and demonstrable alignment between relief mechanisms and the tax system’s purpose. The analysis confirms that sector-specific tax regimes must be assessed not merely by their stated objectives, but by their legal design, effects, and internal justification. State aid rules, in particular, require that any differentiation within a tax framework must be inherent to the system and proportionate to the objective pursued. This thesis contributes to the understanding of how environmental or resource-targeted taxation must be structured to comply with the legal boundaries of the internal market. It underscores the need for legally coherent integration of fiscal and policy objectives to design future sectoral tax measures.}},
author = {{Arnarson, Ægir Örn}},
language = {{eng}},
note = {{Student Paper}},
title = {{Legal Limits on Sector-Specific Resource Taxation in the EU/EEA - A Case Study of Aquaculture Taxation}},
year = {{2025}},
}