In September 2005 the European Commission opened a formal investigation into two fiscal incentive schemes adopted by Sicily. These schemes propose a five-year exemption from Italian tax on regional production activities (IRAP) for companies active in tourism, hotels, cultural goods, agricultural feed, information technology or craft activities. The schemes also propose a so-called “Euro-Mediterranean Centre of Finance and Insurance Services”. Subsidiaries of financial and insurance companies that operate within the Centre would be able to benefit from a 50 per cent reduction on the rate of IRAP. The Commission has concluded that these fiscal incentives schemes are incompatible with the EC State aid rules because they selectively favour certain categories of undertaking.