(1)

On 26 February 2007 Italy adopted the Law No 17/2007 (2), including Article 4-bis which prolongs the application of a regional aid scheme providing automatic tax credits for new investments in the assisted areas of Italy, which had been approved in 2001 and 2002 by the Commission (3) and which expired on 31 December 2006.

(2)

By letter dated 7 March 2007 (D/50987) the Commission requested the Italian authorities to submit information on Article 4-bis of the Law No 17/2007. The Italian authorities replied by letter, registered at the Commission on 19 March 2007 (A/32387).

(3)

By letter of 10 July 2007 (4), the Commission informed Italy of its decision to initiate the formal investigation procedure laid down in Article 88(2) of the EC Treaty in respect of the measure created by Article 4-bis of the Law No 17/2007.

(4)

The Commission Decision to initiate the procedure was published in the Official Journal of the European Union (5). The Commission invited interested parties to submit their comments on the aid.

(5)

The Commission received no comments from interested parties.

(6)

By letter dated 24 July 2007, registered at the Commission on 25 July 2007, the Commission was informed of the intention of the Italian authorities to repeal the measure. By e-mail of 9 October 2007, the Italian authorities confirmed their intention and submitted a draft legal provision repealing the measure.

(7)

On 23 November 2007 the Commission asked the Italian authorities to submit the adopted final legal provision, which repealed the measure in question.

(8)

The Italian authorities submitted the adopted final legal provision to repeal Article 4-bis of Law No 17/2007 by letter registered at the Commission on 15 January 2008.

(9)

The measure aimed at prolonging the period during which the investment expenditure under an approved regional aid scheme, which expired on 31 December 2006, could have been incurred.

(10)

Under the regional aid scheme (N 646/A/2000), which aimed at promoting regional development in the Italian regions eligible for regional aid under the regional aid map 2000-2006 (6) and which expired on 31 December 2006, a beneficiary obtained the legal right to a tax credit by carrying out a positive net investment that was established on the basis of an accountancy/balance sheet approach for eligible expenses to be incurred before 2007. The original scheme was amended in 2002 with the introduction of a budgetary-cap mechanism requiring the beneficiary to apply for a reservation of funds to the fiscal authorities. The amendment did not change the expiry date for the scheme, nor its limitation to expenditure incurred before 2007.

(11)

By adopting Article 4-bis of the law No 17 of 26 February 2007, the Italian authorities extended the period during which expenditure could have been incurred until 2008.

(12)

The Commission refers to sections 4.1 and 4.2 of its Decision to open the formal investigation procedure.

(13)

On 24 July 2007 the Italian authorities informed the Commission of their intention to repeal the measure.

(14)

On 9 October 2007 the Italian authorities reassured the Commission that the measure would be repealed by Article 3, comma 18 of the 2008 Finance Bill (d.d.l. Finanziaria 2008), approved by the Council of Ministers on 28 September 2007.

(15)

Following the Commission's request to submit the adopted definite legal provision repealing the measure, the Italian authorities submitted to the Commission the text of Article 1, comma 65 of the Budget Law 2008 (7) (Legge finanziaria) on 15 January 2008 which includes the relevant legal provisions which repeal Article 4-bis of the law No 17 of 26 February 2007.

(16)

Article 1, comma 65 of the Budget Law 2008 stipulates that the amendment to the original legal scheme adopted by Article 4-bis of Law No 17/2007, i.e. the possibility to prolong the eligible investment expenditure until 2008, is repealed. Further, Article 2, comma 65 of the Budget Law 2008 also foresees the reallocation of the budgetary appropriations of the measure (8).

(17)

Since the tax credit accrued with reference to the eligible costs incurred in 2007 can only be claimed definitively at the moment of the 2007 fiscal declaration, in 2008, at the time this tax declaration has to be submitted to the fiscal agency, no legal basis or budget for the tax credit exist.

(18)

The measure has therefore become nil and void, and no tax credits can be granted for expenditure incurred after 2006 on the basis of the legal provision adopted by Article 4-bis of L. 17/2007.