Brussels, 10/06/2011 (Agence Europe) - The Court of Justice of the EU ruled on Thursday 9 June to uphold three Commission decisions from December 2001 which found that tax exemptions granted by the Basque authorities to new established businesses in the Territorios Históricos of Álava, Vizcaya and Guipúzcoa were state aid incompatible with the common market and had to be recovered. It ruled further that the regional authorities involved may not rely on the length of the procedure conducted by the Commission to challenge recovery of aid, as they themselves contributed to the situation by failing to cooperate and notify the aid.
Corporation tax exemptions were granted over a 10-year period from 1993 to companies newly established in the three territories. At the time, the Commission was not informed and so could not approve them. Following a first complaint, the Commission opened an investigation into the measures in 1995 but no satisfactory answers were received to its requests to the Spanish authorities for information on the beneficiaries of the exemptions. Following a further complaint in 2000, the Commission initiated a formal investigation procedure which resulted in three decisions in 2001 against the aid and called for its recovery. The Basque regional authorities referred the matter to the General Court, which, in 2009, upheld the three decisions, ruling that the exemptions did, indeed, constitute prohibited operating aid and could not be classified as investment or employment aid. Furthermore, the General Court rejected the argument that the tax measures were “existing aid” which, as such, could not be the subject of a decision to recover, but only, should the case arise, of a decision of incompatibility producing effects for the future.
In its judgment on these cases (C-465/09P and C-470/09P), the Court dismissed the appeals lodged by the Basque regional authorities against the General Court's ruling. It said that the General Court was correct in holding that the Commission had not authorised the disputed tax systems before receiving the 2000 complaint (see above) and adopting the decision to initiate the formal investigation procedure. In the absence of a clear and definitive statement of its position, it cannot be considered that the Commission had authorised, explicitly or implicitly, the disputed tax systems: - the disputed systems could not, therefore, be considered as “existing aid” which could not be the subject of a decision to recover aid already paid. In similar vein, the Court added that the appellants had failed to prove any clear and definitive indication of a Commission position in favour of the disputed regimes.
Moreover, the Court considered that the appellants could not rely on the argument that the procedure was excessively long to challenge the recovery of the aid granted under the disputed tax systems. Not only had the systems not been notified, but the appellants had not provided the Commission with the information it had requested of the Spanish authorities on the identities of the beneficiaries of the disputed tax systems. Indeed, it was only further to the complaint made in 2000 that the Commission learned of the existence of a company which had received exemptions. That being so, the Court considered that the length of time which elapsed between receipt of that complaint and adoption of the final decisions on 20 December 2001 cannot be regarded as excessive. (F.G./transl.rt)