The European Commission has given Belgium and France until the end of 2017 to abolish corporate tax exemptions currently granted to their ports, which are in breach of EU state aid rules.
Profits by port operators must be taxed under “normal national corporate tax laws to avoid distortions of competition,” noted a statement from the EU.
From January 1, 2018, all ports will be subject to the same corporate taxation rules as other companies, it added.
Incidentally, the Port of Rotterdam recently called for more state aid from the Dutch government, criticising the fact it is liable to pay corporation tax this year, following a similar decision by the European Commission.
Commissioner Margrethe Vestager, in charge of competition policy, stated: “The Commission decisions for Belgium and France – as previously for the Netherlands – make clear that unjustified corporate tax exemptions for ports distort the level playing field and fair competition. They must be removed.”
In Belgium, a number of sea and inland waterway ports, including the Port of Antwerp, are exempt from the general corporate income tax regime.
“These ports are subject to a different tax regime, with a different taxable base and tax rates, resulting in an overall lower level of taxation for Belgian ports as compared to other companies in Belgium,” noted the statement from the European Commission.
Most French ports, notably the 11 “grands ports maritimes” (including Dunkerque, Le Havre and Marseille) as well as the Port autonome de Paris, and ports operated by chambers of industry and commerce, are fully exempt from corporate income tax.
According to the Commission, the tax exemptions do not pursue a clear objective of public interest, such as the promotion of mobility or multimodal transport.
Instead, the tax savings generated can be used by the port operators in any way they seem fit, it added.
The European Commission opened a formal investigation procedure into Belgium and France’s taxation of ports in July 2016 after asking the countries to adapt their legislation to comply with its state rules at the start of that year.