De minimis rule – exemption of small amounts of State aid from notification (from 2024)

SUMMARY OF:

Regulation (EU) 2023/2831 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid

Article 107 of the Treaty on the Functioning of the European Union (TFEU)

Article 108 TFEU

WHAT IS THE AIM OF THE REGULATION?

Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) sets out which measures constitute State aid.

Article 108(3) TFEU requires, as a general principle, State aid to be notified to the European Commission so that it can assess whether the aid is compatible with the single market.

The regulation sets out the conditions that small amounts of State aid must meet to avoid having to be notified to the Commission.

KEY POINTS

Scope

The regulation applies to aid to all businesses, except aid for the following:

primary production of fishery, aquaculture and agricultural products;
processing and marketing of fishery, aquaculture and agricultural products where the amount of aid is fixed on the basis of the price or quantity of items purchased or put on sale, or additionally in the case of agricultural products, where the aid is partly or wholly passed on to primary producers;
export-related activities, such as a distribution network, to European Union (EU) Member States or non-EU countries;
use of domestic goods and services over imported ones.

De minimis aid

The following conditions apply.

Member States cannot give more than €300,000 over 3 years to a single undertaking (meaning the enterprise that receives the aid and linked enterprises).
Aid is:
- considered granted at the moment that the legal right to receive the aid is conferred on the business, irrespective of when it is actually paid;
- expressed as a cash grant using gross figures;
- discounted to its value when granted if paid in several instalments.
Aid granted to a business which subsequently splits into two or more separate entities is allocated to the entity taking over the activities for which the aid was used.
Aid granted under this regulation may be added to de minimis aid permitted under Regulations (EU) Nos 1408/2013 and 717/2014 up to €300,000.
Aid granted under this regulation may be fully cumulated with de minimis aid permitted under Commission Regulation (EU) 2023/2832.

Gross grant equivalent

The regulation applies only to aid where the gross amount is clearly identifiable at the moment of granting. As a result, all aid other than grants must be precisely calculated in terms of gross grant equivalent. Known as ‘transparent de minimis aid’, this rule applies to:

grants and interest subsidies;
loans if:
- the beneficiary is not insolvent and, for large companies, the beneficiary has at least a B– credit rating,
- the loan is secured by at least 50% collateral and amounts to a maximum of either €1.5 million over 5 years or €750,000 over 10 years;
capital injections or risk finance in the form of equity or quasi-equity if the total amount is below the €300,000 ceiling;
guarantees if:
- the beneficiary is not insolvent and, for large companies, the beneficiary has at least a B– credit rating,
- the guarantee does not exceed 80% of the loan at any moment and represents a maximum of either €2,250,000 over 5 years or €1,125,000 over 10 years,
- the gross grant equivalent is calculated on the basis of safe-harbour premiums which protect from liability or penalty, or the methodology used is appropriate and notified to the Commission before the guarantee is given;
aid to financial intermediaries implementing a de minimis aid scheme, provided they meet certain conditions;
other forms of aid if they respect the €300,000 ceiling.

Monitoring and reporting

Member States must do the following.

Record information, such as the amount of aid granted and the beneficiary, in a publicly accessible central national or European register from 1 January 2026. Financial intermediaries administering de minimis aid schemes report on a quarterly basis the total amount of de minimis aid they receive.
Upload information within 20 working days of the aid being granted and keep it for 10 years.
Verify that the €300,000 ceiling is not exceeded before approving de minimis aid under this regulation or under Regulations (EU) Nos 1408/2013 and 717/2014.

Under transitional arrangements, aid granted before the regulation enters into force is where certain conditions are met.

FROM WHEN DOES THE REGULATION APPLY?

The regulation applies from 1 January 2024 until 31 December 2030.

BACKGROUND

Article 2 of Regulation (EU) 2015/1588 (see summary) on the application of Articles 107 and 108 to certain types of State aid allows the Commission to include a de minimis rule in any regulation it adopts. This enables it to exempt small amounts of aid from EU State aid control since they are considered not to have any impact on competition or trade in the single market.

The regulation complements the regulation on de minimis aid for services of general economic interest (Commission Regulation (EU) 2023/2832 – see summary).

MAIN DOCUMENTS

Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ L, 2023/2831, 15.12.2023).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 2 – Aids granted by states – Article 107 (ex Article 87 TEC) (OJ C 202, 7.6.2016, pp. 91–92).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 2 – Aids granted by states – Article 108 (ex Article 88 TEC) (OJ C 202, 7.6.2016, pp. 92–93).