Italy: EC determines corporate tax exemption for ports must be repealed
Italy: EC determines corporate tax exemption for ports
Italy must repeal corporate tax exemptions granted to its ports, in order to align its tax regime with EU state aid rules, according to today’s decision of the European Commission.
The EC has determined that profits earned by port authorities from economic activities must be taxed under normal national corporate tax laws to avoid distortions of competition. Today's decision results from the EC's inquiries into the taxation of ports in EU Member States.
As explained by an EC release, port authorities in Italy are fully exempt from corporate income tax. In January 2019, the EU invited Italy to adapt its legislation so 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. The EC in November 2019 then 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.
The EC has concluded its assessment, and determined that the corporate tax exemption granted to Italian ports provides them with a selective advantage, in breach of EU state aid rules.
Italy now has to take the necessary steps to remove the tax exemption so that beginning January 2022, all ports are subject to the same corporate taxation rules as other companies.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.