EU to Fight Spanish Ship Finance Scheme

Maritime Activity Reports, Inc.

February 29, 2016

Regulators cracking down on national schemes which benefit some; more legal battles ahead with Luxembourg, Dutch tax appeals.

EU state aid regulators are looking to Europe's top court to back their decision against a Spanish tax lease scheme for shipbuilders, one of several cases included in a crackdown on national tax programmes which benefit only certain companies.

The decision by the European Commission on Monday to appeal to the Luxembourg-based Court of Justice of the European Union came after a lower court threw out the EU executive's finding in December last year.

Judges said the Spanish scheme which involved financing ship construction through a structure with two intermediaries, and allowing shipping companies to get a 20-30 percent rebate on the price of vessels built by Spanish shipyards, was not illegal state aid as the Commission claimed.

The EU competition enforcer said it would fight the ruling.

"The Commission has decided to appeal the General Court's judgment annulling the Commission's 2013 decision declaring the Spanish tax lease system illegal under state aid rules," Commission spokesman Ricardo Cardoso said in an email.

There is a total of 65 cases pending before the court against the EU finding. The Commission took action after some companies which lost out in shipbuilding contracts took their grievances to the regulator.

The Commission faces more legal battles ahead after the Dutch government challenged its decision ordering it to recover up to 30 million euros ($32.67 million) from Starbucks and Luxembourg also did the same for a ruling related on Fiat Chrysler Automobiles.

Apple and Amazon are also in the EU crosshairs over their tax deals with the Irish and Luxembourg authorities, respectively.

Reporting by Foo Yun Chee

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