EU launches probe into tax exemptions for French, Belgian ports

Ports in France and Belgium may be unfairly benefiting from tax exemptions that give them an advantage over competitors, the European Commission said Friday as it launched an investigation into the issue.

Ports across Europe are in fierce competition for trade from the shipping industry, which transports goods from Asia and other parts of the world for consumers and businesses. The commission, the bloc's competition watchdog, is charged with ensuring a level playing field.

"Ports play a key role in the EU's economy," said EU Competition Commissioner Margrethe Vestager. "Tax exemptions shouldn't distort competition by giving an unfair advantage to some ports over others in Europe."

Most French ports - such as Bordeaux, Dunkerque, Le Havre, Marseille, the port of Paris and in locations such as Guadeloupe and Martinique - are fully exempt from corporate income tax, the commission said.

Belgian ports including Antwerp, Bruges, Brussels and Ostend are subject to a special tax regime that keeps their levels of taxation low, it added.

In January, both countries were asked to abolish their tax exemptions for ports. Their failure to do so has prompted the commission to launch an investigation, it said.

It noted, however, that the inquiry would only focus on economic activities at the ports in question. Activities relating to safety, surveillance or traffic control fall outside the scope of EU state aid rules, it added.

Since the tax exemptions predate the formation of the European Union in 1958, France and Belgium cannot be asked to recover any unpaid taxes. If the commission finds that a country illegally granted state aid, it can normally order this to be repaid.

Last update: Fri, 08/07/2016 - 16:29

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