State aid and de minimis aid

De minimis aids are small amounts of aid that are deemed not to have any effect on trade between Member States and not to distort or threaten to distort competition.

The Commission created de minimis aid in order to avoid administrative and procedural constraints imposed by the Treaty by setting a ceiling of public intervention below which Article 107 TFEU is presumed not to apply insofar as the fourth condition to establish the existence of an aid within the meaning of Article 107(1) TFEU is not met.

The Commission formalized this position in its 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.

Under this Regulation, the total amount of de minimis aid granted per Member State to an undertaking may not exceed EUR 300,000 per country over any period of three years.

The period of three years to be taken into account should be assessed on a rolling basis. Therefore, for each new grant of de minimis aid, the total amount of de minimis aid granted in the previous 3 years needs to be taken into account.

The Regulation only applies to transparent aid for which it is possible to calculate precisely the gross grant equivalent of the aid ex ante without any need to undertake a risk assessment (for example grants or interest rate subsidies, loans secured by collateral covering at least 50 % of the loan and the loan amounts to either EUR 1,500,000 over five years or EUR 750,000 over 10 years).

The aid must be given to a single undertaking. All entities which are controlled (on a legal or on a de facto basis) by the same entity should be considered as a single undertaking.

The threshold of EUR 300,000 is applicable per Member State. An undertaking can thus benefit from multiple amounts of de minimis aid exceeding globally the cap of EUR 300,000  if this cap is not exceeding within one Member State.

De minimis aid has the merit of being flexible as it can cover any type of costs.

It shall however not be cumulated with State aid granted for the same eligible costs (e.g. operating aid or investment aid) if such cumulation would lead to exceed the highest relevant aid intensity or aid amount laid down in the GBER or in a decision adopted by the Commission.

De minimis aid which is not granted for or attributable to specific eligible costs may be cumulated with other State aid granted under a block exemption regulation or a decision adopted by the Commission.

De minimis aid may also be cumulated with other de minimis aid¹ as long as the foreseen ceiling is not exceeded.

Currently, if no central register on de minimis aid exists, it is the responsibility of the granting authority to verify whether the de minimis ceiling is respected before granting the aid. Concretely, it must obtain from the undertaking, before granting the de minimis aid, in written or electronic form, a sworn declaration relating to all de minimis aid received during the current and the two previous tax years, in order to verify that the ceiling is not exceeded as a result of the granting of the de minimis aid.

As the beneficiary must be provided with the information on the amount of aid granted, the entity granting the aid must formally inform the beneficiary, by means of the agreement granting the aid or by a letter, on the amount of de minimis aid received and on the de minimis character of the aid by reference to the relevant Regulation.

Before 1 January 2026, Member State must set up a central register or use the one that will be made available at the EU level to verify prior their grant the compliance to the cap for each potential beneficiary and to register new de minimis aid. Indeed, public authorities will have to register within 20 working days following the grant of the aid information relating to the identification of the beneficiary, the aid amount, the granting date, the granting authority, the aid instrument and the sector involved on the basis of the statistical classification of economic activities in the Union (‘NACE classification’).

The central register  will have to be publicly accessible whilst in compliance with the Union rules on data protection, including through the pseudonymisation of specific entries where necessary. The central register will replace once operational the obligation for the beneficiary to submit a sworn declaration.

The number of de minimis aid granted under de minimis Regulation is increasing, although undertakings are not fully aware of this concept and the consequences of exceeding the EUR 300,000 ceiling. In this respect, if there is no central register, it is useful to specify that the risk lies with the beneficiary in the event of incorrect or incomplete declarations, as no fine can be imposed on the public authority that has granted such aid above the permitted ceiling.

Regulation (EU) No 1407/2013 was initially due to expire on 31 December 2020.

In 2019, the European Commission launched a public consultation on raising the de minimis ceiling up to EUR 500,000. However, the Commission postponed the revision of the Regulation at the end of 2023 due to the COVID-19 pandemic. Its term has been prolonged until the end of 2023.

In November 2022, the Commission published the draft de minimis Regulation in the Official Journal, which is expected to enter into force on 1 January 2024 for a period of six years.

The changes are limited to an increase in the ceiling to EUR 275,000 over three fiscal years. The draft Regulation also imposes the obligation to create a central register per Member State, which will have to include the identification of the beneficiary, the amount of aid, the authority concerned, the form of the aid and the sector concerned. A public consultation was organised by the Commission. Therefore, this project is not yet final.

CMS lawyers represent both public authorities and private companies on all aspects of State aid rules. This includes:

• Legal assessment of the existence of an aid and its compatibility; 
• Assistance with the formalities to be implemented in compliance with the de minimis Regulation (sworn declaration, de minimis agreement/letter);
• Assistance with respect cumulation rules (GBER and de minimis aid, etc).
• Set up of aid schemes;
• Assistance to public authorities in the notification of State aid to the European Commission;
• Assistance to public authorities or beneficiaries in State aid investigations by the European Commission drafting and lodging complaints before the European Commission; 
• Litigation before national and EU Courts.

The CMS State Aid Practice Area Group comprises 40 State aid law specialists practicing State aid law in 17 jurisdictions being located in 20 cities in Europe and beyond – all committed to assist you. 

Contact your local expert here:

CMS State Aid Group

¹ Note that it exists specific de minimis Regulation for undertakings providing services of general economic interest (Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest) or in the agriculture sector (Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector).