Article 7 Incentive effect

This Regulation shall only exempt aid which has an incentive effect.

Aid shall be considered to have an incentive effect if it enables the beneficiary to carry out activities or projects which it would not have carried out as such in the absence of the aid.

This condition shall be considered to have been fulfilled if, before work on the project or activity has started, the beneficiary has submitted an application for the aid to the Member State concerned.

The condition laid down in paragraph 2 shall not apply as regards fiscal measures establishing a legal right to aid in accordance with objective criteria and without further exercise of discretion by the Member State if those fiscal measures have been adopted before work on the aided project or activity has started.

If the conditions of paragraphs 1 to 3 are not fulfilled, the entire aid measure will not be exempted under this Regulation.