On 27 July 2017, the European Commission formally requested Belgium and France to abolish corporate tax exemptions for their ports, considering that their national regimes for the taxation of ports were incompatible with EU State aid regulation.

In 2013, the European Commission initiated inquiries regarding the functioning and taxation of ports in Member States. These inquiries revealed that in most Member States port economic activities were subject to the normal corporate tax regime; however, certain Member States were exempt.

In July 2014, the European Commission informed Belgium and France that it doubted that their national regimes for the taxation of ports were compatible with EU regulation on State aid.

Following several exchanges, in January 2016 the European Commission asked Belgium and France to adapt their legislation to ensure public and private ports pay corporate tax on their economic activities, in the same way as companies in other sectors.

Belgium and France did not accept the Commission’s proposal and therefore the Commission opened a formal investigation procedure in July 2016.

On 27 July 2017, the European Commission formally requested Belgium and France to abolish the corporate tax exemptions for their ports.

In Belgium, all sea and inland waterway ports (Antwerp, Bruges, Brussels, Charleroi, Ghent, Liège, Namur, Ostend and the ports along the canals) are affected by the exemption from general corporate income tax under Belgian law. They are subject to a different tax regime which is more favourable than the one applicable to companies in other sectors.

In France, 11 large major ports (Bordeaux, Dunkirk, La Rochelle, Le Havre, Marseille, Nantes Saint-Nazaire, Rouen, Guadeloupe, French Guiana, Martinique and Réunion), the Autonomous Port of Paris and ports operated by chambers of industry and commerce are fully exempt from corporate income tax.

At the end of its investigation, the Commission concluded that the corporate tax exemptions granted by Belgium and France to their ports give them a special advantage which distorts competition between Member States and therefore constitutes an incompatible aid.

The law providing for corporate tax exemptions for ports already existed before the accession of France and Belgium to the European Community in 1958. Therefore, these measures are considered as existing aids and they should only be modified for the future. Thus, the beneficiaries of such exemptions cannot be compelled to reimburse the aid they have benefited from in the past.

The Belgian and French authorities must now modify their legislation in order to include port operators in the scope of normal national tax laws before the end of 2017.

Belgium and France or the ports affected may challenge this decision before the General Court of the EU.

A similar procedure was launched against the Netherlands. In January 2016, the European Commission adopted a decision concluding that corporate tax exemptions granted to Dutch seaports constituted incompatible State aid, and the Commission requested the Netherlands to impose corporate tax on their ports from 1 January 2017.

This decision is in line with the Competition Commissioner’s main priority in State aid: selective fiscal advantages for undertakings. It should also be emphasized that ports not covered by State rules until recently are not clearly subject to those constraints. For example, the recent new Block Exemption Regulation of 14 June 2017 provides for investment aid to ports but is rather limited in its scope.  

It is also a clear signal to Member States imposing particular tax regimes on public entities engaged in economic activities, such as certain associations of municipalities in Belgium.