31.10.2003 Official Journal of the European Union L 283/51 COUNCIL DIRECTIVE 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (Text with EEA relevance) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Com- munity, and in particular Article 93 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament, Having regard to the opinion of the European Economic and Social Committee, Whereas: (1)  The scope of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils (') and of Council Directive 92/82[EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils () is restricted to mineral oils. (2)  The absence of Community provisions imposing a minimum rate of taxation on electricity and energy products other than mineral oils may adversely affect the proper functioning of the internal market. (3)  The proper functioning of the internal market and the achievement of the objectives of other Community poli- cies require minimum levels of taxation to be laid down at Community level for most energy products, including electricity, natural gas and coal. (4)  Appreciable differences in the national levels of energy taxation applied by Member States could prove detri- mental to the proper functioning of the internal market. (5)  The establishment of appropriate Community minimum levels of taxation may enable existing differences in the national levels of taxation to be reduced. (6) In accordance with Article 6 of the Treaty, environ- mental protection requirements must be integrated into the definition and implementation of other Community policies. (7)  As a party to the United Nations Framework Convention on Climate Change, the Community has ratified the Kyoto Protocol. The taxation of energy products and, where appropriate, electricity is one of the instruments available for achieving the Kyoto Protocol objectives. (") OJ L 316, 31.10.1992, p. 12. Directive as last amended by Directive 94/74/EC (OJ L 365, 31.12.1994, p. 46). () OJ L 316, 31.10.1992, p. 19. Directive as last amended by Directive 94/74[EC. ®) (10) (12) (14) The Council needs to examine the exemptions and reductions and the minimum levels of taxation periodi- cally, taking into consideration the proper functioning of the internal market, the real value of the minimum levels of taxation, the competitiveness of Community busi- nesses in the international framework and the wider objectives of the Treaty. Member States should be given the flexibility necessary to define and implement policies appropriate to their national circumstances. Member States wish to introduce or retain different types of taxation on energy products and electricity. To that end, Member States should be permitted to comply with the Community minimum taxation levels by taking into account the total charge levied in respect of all indirect taxes which they have chosen to apply (excluding VAT). Fiscal arrangements made in connection with the imple- mentation of this Community framework for the taxa- tion of energy products and electricity are a matter for each Member State to decide. In this regard, Member States might decide not to increase the overall tax burden if they consider that the implementation of such a principle of tax neutrality could contribute to the restructuring and the modernisation of their tax systems by encouraging behaviour conducive to greater protec- tion of the environment and increased labour use. Energy prices are key elements of Community energy, transport and environment policies. Taxation partly determines the price of energy products and electricity. The minimum levels of taxation should reflect the competitive position of the different energy products and electricity. It would be advisable in this connection to base the calculation of these minimum levels as far as possible on the energy content of the products. However, this method should not be applied to motor fuels.