May 16, 2021

Brussels asks Spain to end the tax advantages of its ports | Economy

Brussels asks Spain to end the tax advantages of its ports | Economy



The European Commission has called on Spain on Tuesday to end the favorable tax regime enjoyed by its ports, exempt from corporate tax payments in its main sources of income: port taxes and concession contracts. Brussels believes that these advantages are a form of State aid incompatible with European rules, and calls on the Spanish Government to end them before the end of the year.

"In order to guarantee fair competition across the EU, the ports that generate benefits from their economic activities must be taxed in the same way as other economic operators, neither more nor less", the Competition Commissioner, Margrethe Vestager, has warned.

The rules are even more lax in the Basque Country, where the ports are totally exempt from paying the Corporation tax. The European Commission believes that these benefits harm free competition with the infrastructures of other countries that do not receive the same treatment and fight in the same domestic market for gaining quota, leaving them in inferior conditions.

Spain received the first warning about it in April of last year. Tuesday's proposal to equate the Corporate Tax of the ports to which the rest of companies pay is the second step of that process. But if no action is taken, it will follow its course: Brussels would open in that case an investigation to clarify if the exemptions meet the community standards. Otherwise, it may require Spain to do so under threat of sanctions.

The case of Spain is not the only one. The Commission has asked Italy to end up with a total exemption from the corporate tax that its ports enjoy. And years ago he demanded the same to Holland, Belgium and France. In addition, Brussels is analyzing the situation of these facilities in other countries of the continent.

The Commission believes that the current rules already give sufficient margin to the Member States to contribute to the financing of ports, so it sees excessive add tax privileges. EU countries can invest up to 150 million euros in seaports and up to 50 million euros in inland ports without prior verification by the Commission, as well as assume dredging costs and access navigable waterways. "Ports are key infrastructures for economic growth and regional development, which is why EU rules on State aid allow ample room for Member States to support and invest in ports," Vestager added.

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