Practical Question: cumulation of state aid

Is it allowed for an undertaking to receive regular de minimis aid, in addition to SGEI de minimis aid?

March 2014

Question

On the basis of the SGEI de minimis Regulation of the European Commission, our municipality gives aid to an undertaking, which has been commissioned with the social inclusion of vulnerable groups. As a municipality, we are very pleased with the social activities of this undertaking and, therefore, we would like to make an additional financial contribution. Can we make use of the regular de minimis Regulation of the European Commission and, as such, still provide regular de minimis aid?

BRIEF Answer

Yes, as long as the aid ceiling in the SGEI de minimis Regulation is not exceeded, your municipality can still provide regular de minimis aid, in addition to SGEI regular de minimis aid. We will explain this below.

De minimis aid in general

De minimis aid – irrespective of the question whether this is granted on the basis of the regular de minimis Regulation, the SGEI Regulation, the Regulation on de minimis aid in the agriculture sector or the Regulation on de minimis aid in the fisheries sector – does not constitute aid within the meaning of the European prohibition of State aid (Article 107 TFEU). State aid can only exist if this State aid has a detrimental impact on the inter-State trade. As regards de minimis aid, the Commission deems it not very likely that such a small aid amount can actually have an adverse impact on the trade between the Member States.

SGEI de minimis Regulation

By virtue of the SGEI de minimis Regulation, authorities can grant enterprises, for purposes of providing SGEI, de minimis aid up to an amount of €500,000, without this aid being considered as State aid. The amount applies per undertaking for a period of three years. Thus, if the respective undertaking indeed performs SGEI, the municipality may grant this undertaking aid to an amount of up to €500,000 under the SGEI de minimis Regulation. As said, this will not be considered as State aid.

Cumulation with regular de minimis aid

Still, to what extent is it allowed for a municipality to grand regular de minimis aid to an undertaking, in addition to SGEI de minimis aid? With respect to so-called cumulation (concurrence) with regular de minimis aid, Article 2(7) of the SGEI de minimis Regulation provides that de minimis aid under the SGEI de minimis Regulation may be cumulated with regular de minimis aid up to a ceiling of €500,000.

Ceiling

The above implies that if a municipality has already granted SGEI de minimis aid in the amount of €500,000 to an undertaking, it can no longer make use of the regular de minimis Regulation. After all, the ceiling has been reached. However, if the municipality’s SGEI de minimis aid is less than €500,000 over a period of three years, additional regular de minimis aid of up to €200,000 may be granted. However, the €500,000 ceiling over a period of three years, as laid down in the SGEI de minimis Regulation, may not be exceeded.

Concrete example (calculation)

If the respective undertaking e.g. receives SGEI de minimis aid in the amount of €400,000 over a period of three years, the municipality may still grand this undertaking regular de minimis aid up to an amount of €100,000. However, if the amount of SGEI de minimis aid granted over a period of three years amounts to €300,000, or even less, an additional amount of up to €200,000 of regular de minimis aid may still be granted.

More information

SGEI de minimis Regulation, European Commission
De minimis, State aid, Europa decentraal
SGEI and State aid, services in general economic interest, Europa decentraal
Regular de minimis Regulation, de minimis, State aid, Europa decentraal

Around April, a guideline on SGEI for (local and regional) authorities will be published. This guideline has been written by Europa decentraal by order of the Dutch Ministry of Home Affairs and Kingdom Relations. Europa decentraal will keep you informed via the website and the Europese Ster newsletter.