The European Commission today announced it has opened an in-depth investigation to assess whether tax exemptions granted under Italian law to ports are in line with EU state aid rules.
According to an EC release, a corporate tax exemption for ports that earn profits from economic activities provides them with a competitive advantage when they operate on the internal market and therefore involves state aid, which may not be compatible with EU rules. In Italy, port authorities are fully exempt from corporate income tax.
Italy has not agreed to change its corporate tax legislation as the EC proposed in January 2019. The EC thus has now 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 are confirmed. If they are, the corporate tax exemption for ports in Italy would also amount to “existing aid” because they already existed before the accession of Italy to the EU and the EC would not be able to ask Italy to recover any aid already granted.
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