EY: EU state aid regulation facing significant change

By: Trademagazin Date: 2026. 03. 04. 10:34

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The European Commission is preparing a comprehensive reform of state aid rules: the planned amendment to the so-called block exemption regulation promises easier access, greater flexibility and less administration for companies, while incentives could have a stronger impact. The new framework could enter into force from 2027 and could significantly influence the application of financial subsidies and tax breaks in the European Union, EY points out.

The European Commission has published a new draft of the General Block Exemption Regulation (GBER) on state aid. According to the GBER, Member States can grant aid under their own authority without prior Commission approval, and under the regulation, these aids are considered compatible with the internal market.

“The draft published today represents the largest overhaul of the State aid rules to date and covers all financial incentives as well as tax benefits. The aim is to simplify access to aid, provide greater flexibility and better align state subsidies with today’s economic and social challenges”

– highlighted Tamás Szűcs, EY Tax Partner.

The public consultation on the draft will last until 23 April 2026, the new rules are expected to enter into force on 1 January 2027, and their implementation will be the responsibility of individual Member States.

According to the Commission, access to smaller amounts of support for research and development, environmental protection and other targeted projects could become easier, regardless of company size. The proposal also envisages a more targeted development of the rules on state aid related to environmental protection and the energy transition, and simplifies the framework for research and development and innovation support. It is planned to strengthen incentives for further training and retraining, especially those related to digital, scientific and technological skills. The amendment would also provide broader eligibility for agriculture in most support categories. For small and medium-sized enterprises, forms of support that are better suited to their needs may emerge, including flexible venture capital financing instruments and more favourable tax conditions for employee stock options.

“The draft could significantly reduce administrative burdens, while giving Member States more room to manoeuvre to support competitiveness, sustainability and social cohesion. The amendment could speed up decision-making, make the support system more thoughtful and make subsidies have a stronger overall impact,” said Filip Puzder, EY tax expert.