14 Dec 2022

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Tax exemption for ports : the Commission Decision confirmed by the General Court

In a judgment delivered today in Case T-126/20, the General Court has upheld the Commission Decision concerning a corporate tax exemption scheme implemented by Spain for ports.

In Spain, ports were exempt from corporate income tax on their main sources of revenue, such as port fees or income from rental or concession contracts. In the Basque Country, ports were fully exempt from corporate tax.

In 2019, in the context of state aid SA.38397, the Commission informed Spain that the existing tax regimes provided the ports with a selective advantage that may breach EU state aid rules and proposed appropriate measures. In November 2019, Spain agreed to adapt its legislation to ensure that, as of 1 January 2020, ports, including those located in the Basque Country, would be subject to normal corporate income tax rules. The Commission adopted a decision recording these commitments.

The Port Authority of Bilbao lodged an action for annulment against this decision before the General Court.

In its judgment, the General Court has found that favoring entities considered socially useful by allowing them to benefit from a tax exemption was a selective measure and that no exception linked to a Service of General Economic Interest (“SGEI”) could be applied insofar as there was no link between this exemption and the scope of the SGEI.