EU Commission: No more tax exemptions for Italian ports

The European Commission has requested from Italy to abolish the corporate tax exemptions granted to its ports, in order to align its tax regime with EU State aid rules.

As explained, profits earned by port authorities from economic activities must be taxed under normal national corporate tax laws to avoid distortions of competition. However, Italian port authorities have been fully exempt from corporate income tax.

The new decision results from the commission’s inquiries into the taxation of ports in Member States.

“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,” Margrethe Vestager, Commissioner in charge of competition policy, said.

“Today’s (Dec 4) 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,” Vestager added.

In January 2019, the commission invited Italy to adapt its legislation in order to ensure that ports would pay corporate tax on profits from economic activities in the same way as other companies in Italy, in line with EU State aid rules.

In November of the same year, the commission opened an in-depth investigation to assess whether or not its initial concerns as regards the compatibility of the tax exemptions for Italian ports with EU State aid rules were confirmed.

Source: World Maritime News