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European Commission rules on taxation of ports in Netherlands, Belgium and France

The Netherlands, Belgium and France have been asked to align the taxation of their ports with EU state aid rules.22 Jan 2016

The Netherlands must remove a historic corporate tax exemption given to six seaports, the Commission said, and Belgium and France have been asked to change their legislation to make sure that private and public ports pay corporate tax in the same way as other companies.

The Netherlands introduced corporate tax for public companies in 2015, following a request from the Commission. However, it maintained an exemption that had been in place since 1956 for six publicly-owned ports.

This exemption is distorting competition and must be removed within two months, the Commission said.

Meanwhile, Belgium has had a corporate tax regime in place for a number of sea and inland waterway ports since 1958, with an overall lower level of taxation compared to other companies in the country, the Commission said, while France has given complete exemption from corporate tax to 11 major ports since 1942, the Commission said. 

Because the exemptions have been in place for so long, they are considered to be "existing aid", and they have been assessed using a specific 'cooperation procedure' between the EU member countries and the Commission. The Commission has previously informed Belgium and France of its concerns, and now proposes changes to bring the measures inline with EU rules, it said.

Competition commissioner Margrethe Vestager said: "Ports are key infrastructure for economic growth and regional development. I will soon present a proposal to facilitate unproblematic investments in ports that can create jobs, to exempt them from scrutiny under EU state aid rules. At the same time, the Commission's decisions today regarding the Netherlands, Belgium and France make clear that if port operators generate profits from economic activities these should be taxed under the normal national tax laws to avoid distortions of competition."

The Commission is developing an extension of its 'general block exemption regulation' to cover port investments. This aims to encourage investment in infrastructure with the potential to encourage jobs, the Commission said.

The Commission continues to look into taxation of ports in other EU countries, and has requested information on how certain ports in Germany are financed, it said.

Earlier this month the Commission said that €700 million in tax must be repaid to Belgian authorities, after it concluded that selective tax advantages granted by Belgium under an 'excess profit' tax scheme are illegal under EU state aid rules.