92001E1414

WRITTEN QUESTION E-1414/01

by Theresa Villiers (PPE-DE) to the Commission

(14 May 2001)

Subject: Fiscal State aids

In a statement on 23 February 2000 (IP/00/182) Commissioner Mario Monti said that he had instructed the Commission's Competition Department to examine all the relevant cases of fiscal State aids in business taxation, so as to allow the Commission to comply fully and promptly with its own institutional obligations, also on the basis of the Commission notice on the application of the State aid rules to measures relating to direct business taxation of 11 November 1998.

1. Could the Commission please explain what action it has taken so far to examine relevant cases of fiscal State aids in business taxation?

2. Has the Commission identified any cases where fiscal State aids have been put into effect in breach of the State aid rules of the Community and, if so, what action has the Commission taken?

3. Could the Commission provide a breakdown of the number of cases by Member State?

4. Does the Commission have any plans to amend or update the Communication on the application of the State Aid rules to measures relating to direct business taxation (SEC(1998) 1800)?

Answer given by Mr Monti on behalf of the Commission

(20 July 2001)

In line with its obligations under the EC Treaty, the Commission investigates and evaluates permanently new and existing State Aid measures, including those granted in the form of fiscal aid, pursuant to Article 88 (ex Article 93) of the EC Treaty. As part of this permanent task, it has started to also scrutinise all the tax measures that the Code of Conduct Group reported to the Ecofin Council on 29 November 1999.

In this respect the Commission decided on 11 July 2001 to launch aid investigations under Article 88(2) of the EC Treaty for 11 corporation tax schemes in 8 Member States and to ask to put an end to existing fiscal advantages, under Article 88.1 of the Treaty, to four Member States. These schemes are no longer justified following the higher degree of integration of member States economies due to the completion of the Single Market, the liberalisation of capital movements and the establishment of economic and monetary union.

The Commission will continue to scrutinise tax systems in all Member States and it cannot be excluded that State aid investigations similar to the present, will have to be opened in future.

The Commission is currently evaluating the experience gained in implementing the Communication on the application of the State Aid rules to measures relating to direct business taxation in order to have a basis for the possible up-dating of this notice.