Corsica Wins Extension Of Tax Perks Until 2008

by Ulrika Lomas, Tax-News.com, Brussels

09 January 2003

In a meeting on Tuesday aimed at reducing the economic gap between France and the French Mediterranean island of Corsica, France's Interior Minister, Nicolas Sarkozy, and the President of the European Commission, Romano Prodi agreed upon the extension of certain of the jurisdiction's fiscal derogations, and the provision of more development aid.

Mr Sarkozy, accompanied by 19 Corsican representatives, travelled to Brussels this week seeking a longer phasing-out period for several of the territory's fiscal benefits.

According to reports released after the meeting, Mr Prodi agreed that the eradication process should be extended by five years to 2008, that tax credits for firms operating in Corsica should be increased from 10% to 15%, and that the tobacco industry should remain subject to the current tax regime.

This decision comes two months ahead of a planned meeting of the National Assembly and the Senate, which will amend the French Constitution in order to allow greater regional autonomy.

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