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European Union: EU orders Spain to repay 2007-2011 shipping benefits

2013/07/19

The Spanish shipping sector will have to pay back national aid received between 2007 and 2011. The EU Commission made this decision Wednesday next investigating the country's tax scheme adopted in 2002 for investors financing ship purchases, which was found to be partially compatible with EU regulations on national aid.

Competition Commissioner Joaquin Almunia said that ''economic interest groupings (EIG) and their investors have benefited unlawfully from tax advantages, which they must presently repay to the Spanish national.'' In practice, the economic interest grouping - which the European Commission was at no time notified of - acts on behalf of the maritime transport company by purchasing the ship and acquiring it on a financial leasing basis, again paying it off in the three to five years next work starts on its construction.

The EIG benefits from taxation exclusively on the basis of tonnage, which is a appropriate scheme applicable under the European rules to maritime transport companies, and hands the ship over to the transport company without paying capital gains tax. The maritime transport company acquires the ship with a reduction ranging from 20% to 30% on the purchase price charged by the shipyard.

Almunia said that the all that companies will have to pay back will be determined by Spain itself, which will have to draw up a inventory of the companies that took chance of the scheme deemed 'illegal' according to competition regulations.

The EU antitrust body began its investigations following a number of complaints lodged by several shipbuilders in other member states.

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