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The European Commission’s competition watchdog has launched an in-depth investigation into tax exemptions granted to Italian port authorities.
The move comes a year after the EC launched an initial probe into tax exemptions granted by the governments of Spain and Italy to port authorities.
Last year, the Spanish government amended its tax arrangements for port authorities “to the normal corporate income tax rules, as from 2020”. However, Italy did not follow suit.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Ports are key infrastructure for economic growth and regional development. Our competition rules reflect that and allow member states to invest in ports, creating jobs and preserving competition.
“At the same time, if port operators generate profits from economic activities, these should be taxed in the same way of other companies under the normal national tax laws, to avoid distortions of competition.”
The EC first voiced its concern over the two countries’ tax arrangements in April 2018, after taking “the preliminary view that, in both Italy and Spain, the existing tax regimes provide the ports with a selective advantage that may breach EU state aid rules”.
There were precedents: in 2016, the EC ordered the Netherlands to end a similar tax emption to port authorities and came to the same decision over French and Belgian ports a year later.
In a statement, the EC competition commission added that the removal of tax emptions did not mean European ports were eligible for financial assistance from their governments.
“Member states have many possibilities to support ports in line with EU state aid rules; for example, to achieve EU transport objectives or to put in place necessary infrastructure investments which would not have been possible without public aid,” it said.
Under state aid regulations, EC nations can invest up to €150m in seaports and up to €50m in inland ports “without prior verification by the commission”, including for projects such as dredging in ports and access waterways.