On 27 July 2017, the European Commission has required Belgium and France to abolish the corporate tax exemptions granted to their ports on the basis that profits by port operators must be taxed under normal national corporate tax laws to comply with European State aid rules. Therefore, if port operators generate profits from economic activities, these should be taxed under the normal national tax laws to avoid distortions of competition.
More precisely, in Belgium several sea and inland waterway ports (notably the ports of Antwerp, Bruges, Brussels, Charleroi, Ghent, Liège, Namur, Ostend, the canals in Hainaut Province and Flanders) are exempt under Belgian law from the general corporate income tax regime and are subject to a different tax regime, that leads to an overall lower level of taxation as compared to other companies.
In France, the 11 ‘grands ports maritimes’ (Bordeaux, Dunkerque, La Rochelle, Le Havre, Marseille, Nantes-Saint-Nazaire, Rouen, Guadeloupe, Guyane, Martinique and Réunion), the Port autonome de Paris and ports operated by chambers of industry and commerce, are fully exempt from corporate income tax under French law.
In this framework, the Commission considers that the corporate tax exemptions granted to Belgian and French ports provide them with a selective advantage, in breach of European state aid rules. According to the Commission, those exemptions do not pursue a clear objective of public interest and they can be used by the port operators to fund other activities or to subsidise the prices charged by the ports to customers to the detriment of competitors and fair competition.
Belgium and France now have until the end of 2017 to take the necessary steps to remove the tax exemption and ensure that, from 1 January 2018, all ports are subject to the same corporate taxation rules as other companies. However, the Commission cannot ask the recovery of the aid already granted because those corporate tax exemptions are ‘existing aid’ that already existed before the accession of France and Belgium to the EU.