92003E0124

WRITTEN QUESTION P-0124/03

by Seán Ó Neachtain (UEN) to the Commission

(21 January 2003)

Subject: Special tax designated areas and the west of Ireland

Will the Commission state what its position is on the designation of new special tax areas in general and, in particular, taking into account the very positive advantages that have been experienced in such specially designated tax areas in urban locations, will the Commission state if it will support the designation of new special tax areas in remote rural areas such as the west of Ireland with a view to helping such communities to develop their economies and create important employment opportunities?

Answer given by Mr Monti on behalf of the Commission

(13 February 2003)

Special tax areas are likely to involve State aid in the meaning of Article 87(1) of the EC Treaty. In the case of fiscal advantages not linked to the creation of jobs or to investment or to other purposes recognised as presenting a Community interest, it would involve operating aid, which is in principle incompatible with the common market and is only exceptionally considered compatible under very strict conditions in some specific areas eligible for assistance under Article 87(1)(a) or 87(1)(c)(1). Where such a link does exist, the Commission does not exclude the possibility that such a new policy measure, as outlined by the Honourable Member, could be considered to be compatible with the common market, or might even be exempted from notification pursuant to one of the Commission Exemption Regulations(2). However, on the basis of the information provided, and in the absence of a formal notification pursuant to Article 88, paragraph 3 of the EC Treaty, or of a formal information pursuant to the transparency requirements included in the above-mentioned exemption regulations, the Commission is unable to pronounce itself.

As to Ireland, the Regional Aid Map for the period 2000-2006 for Ireland provides that the Border, Midlands and Western (BMW) region qualifies entirely for assistance under the Article 87(3)(a) derogation and the rest of Ireland: South-East, Mid-West, South-West, Mid-East and Dublin qualifies for assistance under Article 87(3)(c). Any notified regional scheme for the West of Ireland would be examined by the Commission according to the Regional Aid Map for Ireland and the regions under the derogation, as well as to the ceilings on the intensity of aid for initial investment or the aid for job creation approved for each region.

(1) See Guidelines on national regional aid OJ C 74, 10.3.1998, and its amendments OJ C 258, 9.9.2000.

(2) Commission Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment OJ L 337, 13.12.2002. Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises OJ L 10, 13.1.2001.