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EC Questions Tax Perks For Dutch, Other EU Ports

by Ulrika Lomas, Tax-News.com, Brussels

10 July 2014


The European Commission has opened an in-depth investigation into Dutch corporate tax exemptions granted to public companies, including port operators.

The Commission has expressed concerns that exempting certain companies merely because they are publicly owned may give them an advantage over their competitors. It is therefore seeking to verify whether the exemptions are in line with European Union (EU) state rules.

Under Dutch Corporate Tax Law, revenues streaming from economic activities carried out by public bodies are, in principle, exempted from corporate tax. This provision dates back to 1956, before the Netherlands's accession to the EU. To the Commission, the measure constitutes existing aid and its assessment is subject to a specific cooperation procedure between the Netherlands and the Commission.

In May 2013, the Commission asked the Netherlands to abolish the exemptions. Since then, the Dutch authorities have signaled their intention to subject public companies to corporate tax. However, they also plan to keep a number of exemptions in place. Most notably, they would apply in the case of five seaports: Rotterdam, Amsterdam, Zeeland, Groningen, and Moerdijk.

The in-depth investigation will give interested parties the opportunity to submit comments on the measures under review.

Commission Vice President in charge of competition policy Joaquín Almunia said: "Fair competition is crucial for all market players. The Commission therefore needs to verify that public companies, including port operators, in the Netherlands are not given more favorable tax treatment than their private competitors. Furthermore, there should be a level-playing field between ports in the EU, so it is important to make sure that state aid rules are being complied with in all member states."

The Commission says that it has also become aware of possible corporate tax advantages for publicly and privately owned ports in several EU member states, and has found indications of sectoral tax exemptions and reduced rates. In some cases, ports are not subject to corporate tax but to an alternative regime that may be more favorable, while others ports do not pay corporate taxes because they are loss making.

According to the Commission, this raises questions about whether the public financing of these ports respects EU state aid rules.

It has also sent letters to Belgium and France as first steps, with the aim of ensuring that their ports do not benefit from unjustified tax advantages. The Commission has asked Germany for further information on certain ports.

TAGS: tax | marine | European Commission | Belgium | Netherlands | tax incentives | corporation tax | tax planning | France | Germany | tax breaks | European Union (EU) | Europe

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