Articles

European Commission qualified Dutch and Belgian tax regimes for seaports as state aid

European Commission qualified Dutch and Belgian tax regimes for seaports as state aid

European Commission qualified Dutch and Belgian tax regimes for seaports as state aid

01.03.2016

On 21 January 2016, the European Commission decided that the corporate tax exemptions granted to seaports under the existing Dutch and Belgian tax regimes constitute state aid. These exemptions need to be removed from the tax code since they are incompatible with the internal market. The Commission decisions are a result of a broader investigation into the functioning and taxation of ports across EU Member States aimed at ensuring fair competition.

The Commission emphasized in both cases that although it accepts that certain activities of the ports cannot be considered economic activities - and thus fall outside the scope of EU state aid control - the commercial operation of port infrastructure constitutes an economic activity which can be in competition with private companies who are subject to corporate income tax. Furthermore, the Commission found that the tax exemptions for ports are "existing aid" since they predate the entry into force of the Treaty of Rome. This means that any state aid given to the seaports in the past does not need to be recovered.

The Netherlands

As far as the Netherlands is concerned, the Commission already proposed measures to reform the Dutch Corporate Income Tax Code ("Wet Vpb 1969") in May 2013 which also contained exemptions for other public undertakings besides public seaports. Subsequently, the Dutch government adopted revised legislation ("Wet Vpb 2015"), aimed at subjecting public undertakings to corporate tax in the same manner as private undertakings. The Wet Vpb 2015 however, maintains exemptions for Dutch public seaports and for bodies whose activities consist mainly of the management, development or operation of seaports. This remaining exemption triggered the European Commission to start an in-depth formal investigation which resulted in the binding decision of 21 January 2016.

The Dutch government and interested seaports put forward several arguments for upholding the tax exemptions. One of their main arguments was that the Commission's investigation into tax exemptions in other Member States was not progressing at the same pace. As a consequence, Dutch seaports have to compete with seaports that are still benefitting from these tax exemptions. The European Commission considered that this argument does not change the fact that the exemptions constitute state aid, and it does not justify a transitional period with regard to the exemptions for seaports. In absence of EU harmonization of direct taxes, the Commission concluded that the tax position of ports will vary amongst Member States in any event.

While the Dutch state does not have to recover any state aid given to the seaports, it must take the necessary steps to remove the corporate tax exemption for seaports as of 1 January 2017.

Belgium

As regards Belgium, the Commission found that ports are also subject to a different tax regime, with different base and tax rates, resulting in an overall lower level of taxation compared to other companies active in Belgium and therefore grants the ports a selective advantage.

Based on this finding, the Commission proposed measures to Belgium to adapt its legislation in order to ensure that both public and private ports pay corporate tax on their economic activities in the same way as other companies. Belgium has two months to react. If Belgium refuses the Commission’s proposal, the Commission might open an in-depth formal investigation. This final phase may be closed by a Commission decision requiring Belgium to put an end to the existing taxation regime.

This article was published in the Competition Law Newsletter of March 2016. Other articles in this newsletter:

1. General Court largely confirmed Commission's freight forwarding cartel decision
2. CBb ruled that the ACM wrongfully blocked merger between baking companies

Team

Related news

08.08.2019 BE law
Regulating online platforms: piece of the puzzle

Articles - The new Regulation no. 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services, applicable as of 12 July 2020, is another piece of the puzzle regulating online platforms, this time focussing on the supply side of the platforms.

Read more

01.08.2019 NL law
Call of duty: Commission must state reasons when straying from its guidelines

Short Reads - The European Commission has lost a second battle concerning its EUR 15 million fine imposed upon interdealer broker ICAP, this time before the European Court of Justice. The Court upheld the previous judgment of the General Court on the basis of the Commission's failure to state reasons concerning its fining methodology of cartel facilitator ICAP. This may lead to more reasoned Commission decisions in the future - deterrence of cartel behaviour does not justify keeping the methodology for setting the fines as a 'black box'.

Read more

01.08.2019 NL law
General court dismisses all five appeals in the optical disk drives cartel

Short Reads - The General Court recently upheld a Commission decision finding that suppliers of optical disk drives colluded in bids for sales to Dell and HP by engaging in a network of parallel bilateral contacts over a multi-year period. The General Court rejected applicants' arguments regarding the Commission's fining methodology, including that the Commission ought to have provided reasons for not departing from the general methodology set out in its 2006 Guidelines.

Read more

22.07.2019 NL law
HagaZiekenhuis beboet voor datalek

Short Reads - Enkele maanden geleden vierden we de eerste verjaardag van de Algemene Verordening Gegevensbescherming (AVG) met een uitgebreide beschouwing  over de belangrijkste  ontwikkelingen uit  het eerste jaar van de verordening. We concludeerden daarin onder meer dat de door sommigen voorspelde hoge bestuurlijke boetes voor overtredingen van de AVG tot dan toe  - zowel in Nederland als in de andere EU-lidstaten - grotendeels waren uitgebleven.

Read more

01.08.2019 NL law
Brand owners beware: Commission tough on cross-border sales restrictions

Short Reads - The European Commission recently imposed a EUR 6.2 million fine on Hello Kitty owner Sanrio for preventing its licensees from selling licensed merchandising products across the entire EEA. Sanrio is the second licensor (after Nike) to be fined for imposing territorial sales restrictions on its non-exclusive licensees for licensed merchandise. A third investigation into allegedly similar practices by Universal Studios is ongoing. The case confirms the Commission's determination to tackle these practices, regardless of type or form.

Read more

17.07.2019 BE law
EU Single-Use Plastics Directive is now in force: brief recap

Articles - Plastic is a significant and growing global concern. A recent study commissioned by WWF and carried out by the University of Newcastle, Australia, suggests that people are consuming around 2,000 tiny pieces of plastic every week (which is approximately 5 grams of plastic, the weight of a credit card).  In this context, the EU adopted a new directive aiming at tackling marine litter generated from 10 single-use plastic products and from abandoned fishing gear and oxo-degradable plastics. This is called the Single-Use Plastics Directive and has entered into force this month, on 2 July 2019.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring