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EC Investigates Italian Port Tax Exemptions

by Ulrika Lomas, Tax-News.com, Brussels

26 November 2019


On November 15, 2019, the European Commission announced the launch of an in-depth state aid investigation into tax exemptions provided to Italian ports, but welcomed commitments from Spain to abolish similar exemptions for Spanish ports from next year.

EU state aid rules apply to the commercial activities of port infrastructure, such as providing paid access to the port. Given that Italian ports are fully exempt from corporate tax, the EC is of the view that they are receiving a competitive advantage in the internal market which could be contrary to state aid rules.

The Commission has opened an in-depth investigation into the tax exemption provided to ports in Italy because the country has yet to agree to change these rules following a request by the EC in January 2019. However, as this tax exemption is categorized as "existing aid" i.e. they were in place before Italy acceded to the EU, the Commission would be unable to ask Italy to recover any aid already granted.

In the case of Spain, following the Commission decision in January 2019, the Spanish Government has agreed to amend its corporate income tax legislation to bring it in line with EU state aid rules. Notably, the Spanish authorities have committed to subject Spanish ports, including those located in the Basque Country, to the normal corporate income tax rules as from 2020. The Commission formally accepted Spain's commitment in a decision adopted on November 15, 2019.

As the Spanish port tax exemptions were existing aid, the Commission also cannot ask Spain to recover the aid already granted.

TAGS: tax | marine | European Commission | legislation | Italy | Spain | Europe

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