Italy will oppose to the European Commission’s decision to put an end to tax exemptions on Italian ports. The country will take the case to the European Court of Justice.
The aims is to maintain the current model which considers local ports as public infrastructure managed by authorities which are neither a private company nor players active in the market.
In December, the European Commission required Italy to abolish the corporate tax exemptions granted to its ports, in order to align its tax regime with EU State aid rules.
As the EU says, profits earned by port authorities from economic activities must be taxed under normal national corporate tax laws to avoid distortions of competition.
Commissioner Margrethe Vestager, in charge of competition policy, commented:
EU competition rules recognise the relevance of ports for economic growth and regional development, allowing Member States to invest in them. At the same time, to preserve competition, the Commission needs to ensure that, if port authorities generate profits from economic activities, they are taxed in the same way as other companies. Today’s decision for Italy – as previously for the Netherlands, Belgium and France – makes clear that unjustified corporate tax exemptions for ports distort the level playing field and fair competition. They must be removed
In November 2019 the Commission opened an in-depth investigation to determine whether or not its initial concerns as regards the compatibility of the tax exemptions for Italian ports with EU State aid rules were confirmed.
Having concluded its assessment, the Commission considers that the corporate tax exemption granted to Italian ports provides them with a selective advantage, in breach of EU State aid rules. In particular, the tax exemption does not pursue a clear objective of public interest, such as the promotion of mobility or multimodal transport. The tax savings generated can be used by the port authorities to fund any type of activity or to subsidise the prices charged by the ports to customers, to the detriment of competitors and fair competition.
The Commission decision clarifies that if port authorities generate profits from economic activities these should be taxed under the normal national tax laws to avoid distortions of competition.