Brussels, 6 November 2013
State aid: Commission opens in-depth investigation into fiscal exemptions for certain maritime chartering services in France
The European Commission has opened an in-depth investigation to examine whether changes to the French tax rules for maritime companies are in line with EU state aid rules. The Commission will in particular investigate the inclusion of time chartered vessels sailing under non-EU flags in the scope of a favorable fiscal regime based on the taxation of the fleet tonnage. The term “time chartering” refers to transport services which are provided with vessels and crew temporarily rented from other companies. The opening of an in-depth investigation gives interested third parties the possibility to comment on the measure under assessment. It does not prejudge the outcome of the investigation.
In May 2003, the Commission approved the French tonnage tax scheme (case SA.14551). For shipping companies that opt for this alternative taxation, the tax base for the corporate income tax is calculated from the tonnage of the fleet rather than the actual profits of the company. The scheme limited the eligibility of time chartered ships not flagged in the EU. This scheme was in line with the applicable 1997 EU guidelines on state aid to maritime transport, which aim to enhance the competitiveness of shipping companies facing competition from non-EU businesses and boost jobs in the sector.
After the adoption of the Commission's updated guidelines on State aid to maritime transport in 2004, France removed the specific flagging rules for time chartered vessels without informing the Commission. The Commission only became aware of this change through its recent monitoring of the implementation of approved state aid schemes.
At this stage the Commission considers that specific limits on the eligibility of time chartered ships that do not sail under the flag of a Member State should be maintained. Neither the 1997 guidelines nor the 2004 guidelines contain explicit provisions on time chartering. However, in view of the objectives of these guidelines and the Commission's previous decision practice, the Commission considers that allowing such favorable tax treatment to time chartered vessels sailing under non-EU flags should be limited.
The non-confidential version of the decision will be made available under the case number SA.14551 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.