Commission ordered Italy to abolish the corporate tax exemptions granted to its
ports. Profits earned by port authorities from economic activities must be
taxed the antitrust regulators said under normal national corporate tax laws to
avoid distortions of competition.
These steps would align Italy’s tax regime with EU State aid rules
resulted from inquiries the EC conducted into the taxation of ports across EU
member states. The commissions said that these steps would align Italy’s tax
regime with EU State aid rules. Currently, in Italy, port authorities are fully
exempt from corporate income tax.
competition rules recognize the relevance of ports for economic growth and
regional development, allowing Member States to invest in them,” said
Commissioner Margrethe Vestager, who is in charge of competition policy. “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 January 2019,
the EC requested that Italy 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 and in line with EU State aid rules. In November 2019,
the Commission opened an in-depth investigation to assess whether or not its
initial concerns regarding the compatibility of the tax exemptions for Italian
ports with EU State aid rules were confirmed.
exemption does not pursue a clear objective of public interest
its assessment, the EC concluded 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 mob these steps would align
Italy’s tax regime with 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 subsidize the prices
charged by the ports to customers, to the detriment of competitors and fair
Italy now has to take the necessary
steps that starting with January 1, 2022, all ports are subject to the same
corporate taxation rules as other companies.
According to the
EC regulators, Italy now has to take the necessary steps to remove the tax
exemption in order so that starting with January 1, 2022, all ports are subject
to the same corporate taxation rules as other companies. However, since the
corporate tax exemption for ports existed prior to 1957 enactment of the
treaties that formed the EC, it is considered existing aid, and as such Italy
is not required to recover the corporate tax that was not paid in the past.
regarding Italy’s ports follows similar actions by the EU with other member
states. In 2019, Spain agreed to amend its corporate income tax legislation to bring
it in line with EU aid rules. Normal corporate income tax rules were applied to
Spanish ports starting in 2020.
Commission said that it will continue to assess the functioning and taxation of
ports to ensure fair competition in the EU port sector.