91997E2503

WRITTEN QUESTION E-2503/97 by Anne McIntosh (PPE) to the Commission (18 July 1997)

Subject: Legality of the proposed UK windfall tax on privatized utilities

Does the Commission agree that the proposed windfall tax on privatized utilities in the UK is illegal under the provisions of European Union Law?

If so, what action will the Commission be taking to prevent the implementation of this damaging taxation in the UK?

In particular, as the windfall tax is also being levied on the British Airports Authority, does the Commission believe that the proposed tax is contrary to, or against the spirit of, Article 129c of the Treaty concerning Trans-European Networks?

Answer given by Mr Monti on behalf of the Commission (10 November 1997)

The Commission is aware that the United Kingdom recently introduced a special tax ('windfall tax') on the excess profits arising from the floating of the privatised companies on the stock exchange.

It would remind the Honourable Member that under Community law as it now stands Member States are in principle free to set the rates and conditions for the taxation of companies, provided that the principles of equal treatment and non-discrimination are observed within the framework of the basic freedoms provided for in the Treaty.

From the information in its possession, the Commission cannot detect any infringement of Community law in this respect.