Two recent headlines explain so much about the different level of awareness of Italian ports as compared to European ones in respect of competitiveness.

The European Commission requires France and Belgium to abolish tax exemptions for their ports

The European Commission has required France and Belgium to put an end to the most favourable tax exemption regime (i.e. corporate tax exemptions) granted to their ports as compared to companies in other industries.

The European Commission has indeed come to the conclusion that such exemptions constitute incompatible state aid under Article 107 TFEU[1].

More precisely, in Belgium, under Belgian law all sea and inland waterway ports have so far been exempted from general corporate income tax, being subject to a tax regime that is more favourable than the one applicable to companies in other sectors.

Several French ports (including the 11 major ports) have so far likewise been fully exempted from corporate income tax.

On completion of its investigation, the European Commission deemed the corporate tax exemptions granted by France and Belgium in breach of the EU state aid rules, for providing Belgian and French ports with a selective advantage distorting competition among Member States.

Hence, the European Commission asked Belgian and French authorities to adapt their legislation to subject their port operators to the standard corporate tax regime before the end of 2017[2].

Italian Supreme Court rules in favour of Municipalities as to the applicability of “IMU” to ports

On its part, the Italian Supreme Court[3] has recently expressed its concern about the application of IMU[4] to Italian ports, stating that terminal operators should pay such tax for their use of open-air areas.

In the past, certain Italian courts[5] held that open-air port areas, even if granted under concession, should be considered as customs areas used for handling and storing goods and, therefore, intended for public utility purposes and, accordingly, exempt from such tax.

Law No. 286/2006 has not completely solved the problem by limiting the tax exemption only to real estate units used for public service activities. This led to considering IMU applicable to freight terminal operators and the exemption applicable to passenger terminal operators.

The Supreme Court’s judgment sheds light on how useless have been all the complaints put forward by terminal operators alleging that they already pay a fee for the areas granted under concession to carry on a business that contributes large sums to the State’s coffers (e.g. port taxes and anchorage dues).

Therefore, the two interesting pieces of news examined here show how Italian tax lawmakers and courts tend to increase tax levy, making the exercise of port activities more burdensome, as compared to other countries in which, following a completely different approach, tax exemptions for ports have been maintained for years (until the European Commission decided to abolish them).

Direct consequence of this is the lack of competitiveness that typically plagues Italian port companies as compared to their European competitors.