CHAPTER III U.K. Eligibility of expenditure and durability
Article 65U.K.Eligibility
1.The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in, or on the basis of, this Regulation or the Fund-specific rules.
2.Expenditure shall be eligible for a contribution from the ESI Funds if it has been incurred by a beneficiary and paid between the date of submission of the programme to the Commission or from 1 January 2014, whichever is earlier, and 31 December 2023. In addition, expenditure shall only be eligible for a contribution from the EAFRD if the relevant aid is actually paid by the paying agency between 1 January 2014 and 31 December 2023.
3.By way of derogation from paragraph 2, expenditure under the YEI shall be eligible as of 1 September 2013.
4.In the case of costs reimbursed pursuant to points (b) and (c) of the first subparagraph of Article 67(1), the actions constituting the basis for reimbursement shall be carried out between 1 January 2014 and 31 December 2023.
5.By way of derogation from paragraph 4, the starting date in relation to costs reimbursed on the basis of (b) and (c) of the first subparagraph of Article 67(1) for actions under the YEI shall be 1 September 2013.
6.Operations shall not be selected for support by the ESI Funds where they have been physically completed or fully implemented before the application for funding under the programme is submitted by the beneficiary to the managing authority, irrespective of whether all related payments have been made by the beneficiary.
7.This Article shall be without prejudice to the rules on eligibility of technical assistance at the initiative of the Commission set out in Article 58.
8.This paragraph shall apply to operations which generate net revenue during their implementation and to which paragraphs 1 to 6 of Article 61 do not apply.
The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced by the net revenue not taken into account at the time of approval of the operation directly generated only during its implementation, not later than at the final payment claim submitted by the beneficiary. Where not all the costs are eligible for co-financing, the net revenue shall be allocated pro rata to the eligible and non-eligible parts of the cost.
This paragraph shall not apply to:
(a)technical assistance;
(b)financial instruments;
(c)repayable assistance subject to an obligation for full repayment;
(d)prizes;
(e)operations subject to the State aid rules;
(f)operations for which public support takes the form of lump sums or standard scale unit costs provided that the net revenue has been taken into account ex ante;
(g)operations implemented under a joint action plan provided that the net revenue has been taken into account ex ante;
(h)operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation; or
(i)operations for which the total eligible cost does not exceed EUR 50 000.
For the purposes of this Article and Article 61, any payment received by the beneficiary arising from contractual penalties as a result of a breach of contract between the beneficiary and a third party or third parties or that has occurred as a result of the withdrawal of an offer by a third party chosen under public procurement rules (the 'deposit') shall not be considered as revenue and shall not be deducted from the eligible expenditure of the operation.
9.Expenditure that becomes eligible as a result of an amendment to a programme shall only be eligible from the date of submission to the Commission of the request for amendment or, in the event of application of Article 96(11), from the date of entry into force of the decision amending the programme.
The Fund-specific rules for the EMFF may derogate from the first subparagraph.
10.By way of derogation from paragraph 9, specific provisions on the starting date of eligibility may be established in the EAFRD Regulation.
[X111. An operation may receive support from one or more ESI Funds or from one or more programmes and from other Union instruments, provided that the expenditure item included in a payment application for reimbursement by one of the ESI Funds does not receive support from another Fund or Union instrument , or support from the same Fund under another programme.]
Editorial Information
X1 Substituted by Corrigendum to Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (Official Journal of the European Union L 347 of 20 December 2013).
Article 66U.K.Forms of support
The ESI Funds shall be used to provide support in the form of grants, prizes, repayable assistance and financial instruments, or a combination thereof.
In the case of repayable assistance, the support repaid to the body that provided it, or to another competent authority of the Member State, shall be kept in a separate account or separated with accounting codes and reused for the same purpose or in accordance with the objectives of the programme.
Article 67U.K.Forms of grants and repayable assistance
1.Grants and repayable assistance may take any of the following forms:
(a)reimbursement of eligible costs actually incurred and paid, together with, where applicable, contributions in kind and depreciation;
(b)standard scales of unit costs;
(c)lump sums not exceeding EUR 100 000 of public contribution;
(d)flat-rate financing, determined by the application of a percentage to one or more defined categories of costs.
Fund-specific rules may limit the forms of grants or repayable assistance applicable to certain operations.
2.By way of derogation from paragraph 1, additional forms of grants and methods of calculation may be established in the EMFF Regulation.
3.The options referred to in paragraph 1 may be combined only where each option covers different categories of costs or where they are used for different projects forming a part of an operation or for successive phases of an operation.
4.Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, goods or services, only point (a) of the first subparagraph of paragraph 1 shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in paragraph 1 may be applied.
5.The amounts referred to in points (b), (c) and (d) of the first subparagraph of paragraph 1 shall be established in one of the following ways:
(a)a fair, equitable and verifiable calculation method based on:
statistical data or other objective information;
the verified historical data of individual beneficiaries; or
the application of the usual cost accounting practices of individual beneficiaries;
(b)in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary;
(c)in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;
(d)rates established by this Regulation or the Fund-specific rules;
(e)specific methods for determining amounts established in accordance with the Fund-specific rules.
6.The document setting out the conditions for support for each operation shall set out the method to be applied for determining the costs of the operation and the conditions for payment of the grant.
Article 68U.K.Flat rate financing for indirect costs and staff costs concerning grants and repayable assistance
1.Where the implementation of an operation gives rise to indirect costs, they may be calculated at a flat rate in one of the following ways:
(a)a flat rate of up to 25 % of eligible direct costs, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method or a method applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;
(b)a flat rate of up to 15 % of eligible direct staff costs without there being a requirement for the Member State to perform a calculation to determine the applicable rate;
(c)a flat rate applied to eligible direct costs based on existing methods and corresponding rates, applicable in Union policies for a similar type of operation and beneficiary.
The Commission shall be empowered to adopt delegated acts in accordance with Article 149 concerning the definition of the flat rate and the related methods referred to in point (c) of the first subparagraph of this paragraph.
2.For the purposes of determining staff costs relating to the implementation of an operation, the hourly rate applicable may be calculated by dividing the latest documented annual gross employment costs by 1 720 hours.
Article 69U.K.Specific eligibility rules for grants and repayable assistance
1.Contributions in kind in the form of provision of works, goods, services, land and real estate for which no cash payment supported by invoices, or documents of equivalent probative value, has been made, may be eligible on condition that the eligibility rules of the ESI Funds and the programme so provide and that all the following criteria are fulfilled:
(a)the public support paid to the operation which includes contributions in kind does not exceed the total eligible expenditure, excluding contributions in kind, at the end of the operation;
(b)the value attributed to contributions in kind does not exceed the costs generally accepted on the market in question;
(c)the value and the delivery of the contribution can be independently assessed and verified;
(d)in the case of provision of land or real estate, a cash payment, for the purposes of a lease agreement of a nominal amount per annum not exceeding a single unit of the currency of the Member State, may be made;
(e)in the case of contributions in kind in the form of unpaid work, the value of that work is determined by taking into account the verified time spent and the rate of remuneration for equivalent work.
The value of the land or real estate referred to in point (d) of the first subparagraph of this paragraph shall be certified by an independent qualified expert or duly authorised official body and shall not exceed the limit laid down in point (b) of paragraph 3.
2.Depreciation costs may be considered as eligible where the following conditions are fulfilled:
(a)the eligibility rules of the programme allow for it;
(b)the amount of the expenditure is duly justified by supporting documents having equivalent probative value to invoices for eligible costs where reimbursed in the form referred to in point (a) of the first subparagraph of Article 67(1);
(c)the costs relate exclusively to the period of support for the operation;
(d)public grants have not contributed towards the acquisition of the depreciated assets.
3.The following costs shall not be eligible for a contribution from the ESI Funds and from the amount of support transferred from the Cohesion Fund to the CEF as referred to in Article 92(6):
(a)interest on debt, except in relation to grants given in the form of an interest rate subsidy or guarantee fee subsidy;
(b)the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. For derelict sites and for those formerly in industrial use which comprise buildings, that limit shall be increased to 15 %. In exceptional and duly justified cases, the limit may be raised above the respective aforementioned percentages for operations concerning environmental conservation;
(c)value added tax except where it is non-recoverable under national VAT legislation.
Article 70U.K.Eligibility of operations depending on location
1.Operations supported by the ESI Funds, subject to the derogations referred to in paragraphs 2 and 3, and the Fund-specific rules, shall be located in the programme area.
2.The managing authority may accept that an operation is implemented outside the programme area but within the Union, provided that all the following conditions are satisfied:
(a)the operation is for the benefit of the programme area;
(b)the total amount allocated under the programme to operations located outside the programme area does not exceed 15 % of the support from the ERDF, Cohesion Fund and EMFF at the level of the priority, or 5 % of the support from the EAFRD at the level of the programme;
(c)the monitoring committee has given its agreement to the operation or types of operations concerned;
(d)the obligations of the authorities for the programme in relation to management, control and audit concerning the operation are fulfilled by the authorities responsible for the programme under which that operation is supported or they enter into agreements with authorities in the area in which the operation is implemented.
3.For operations concerning technical assistance or promotional activities, expenditure may be incurred outside the Union provided that the conditions set out in point (a) of paragraph 2 and the obligations in relation to management, control and audit concerning the operation are fulfilled.
4.Paragraphs 1 to 3 shall not apply to programmes under the European territorial cooperation goal and paragraphs 2 and 3 shall not apply to operations supported by the ESF.
Article 71U.K.Durability of operations
1.An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within five years of the final payment to the beneficiary or within the period of time set out in State aid rules, where applicable, it is subject to any of the following:
(a)a cessation or relocation of a productive activity outside the programme area;
(b)a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage;
(c)a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives.
Sums unduly paid in respect of the operation shall be recovered by the Member State in proportion to the period for which the requirements have not been fulfilled.
Member States may reduce the time limit set out in the first subparagraph to three years in cases concerning the maintenance of investments or jobs created by SMEs.
2.An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within 10 years of the final payment to the beneficiary the productive activity is subject to relocation outside the Union, except where the beneficiary is an SME. Where the contribution from the ESI Funds takes the form of State aid, the period of 10 years shall be replaced by the deadline applicable under State aid rules.
3.Operations supported by the ESF and operations supported by the other ESI Funds that are not investments in infrastructure or productive investments shall repay the contribution from the Fund only where they are subject to an obligation for maintenance of investment under the applicable State aid rules and where they undergo a cessation or relocation of a productive activity within the period laid down in those rules.
4.Paragraphs 1, 2 and 3 shall not apply to contributions to or by financial instruments or to any operation which undergoes cessation of a productive activity due to a non-fraudulent bankruptcy.
5.Paragraphs 1, 2 and 3 shall not apply to natural persons who are beneficiaries of investment support and, after the completion of the investment operation, become eligible for and receive support under Regulation (EU) No 1309/2013 of the European Parliament and of the Council where the investment concerned is directly linked to the type of activity identified as eligible for support from the European Globalisation Adjustment Fund.