2002/894/EC: Commission Decision of 11 July 2001 on the State aid scheme implemented by Spain for firms in Guipúzcoa in the form of a tax credit amounting to 45 % of investments (notified under document number C(2001) 1764) (Text with EEA relevance)

Article 1

The State aid in the form of a 45 % tax credit for investments, unlawfully put into effect by Spain in the Province of Guipúzcoa, in breach of Article 88(3) of the Treaty, through the 10th additional provision of Provincial Law No 7/1997 of 22 December 1997, is incompatible with the common market.

Article 2

Spain shall abolish the aid scheme referred to in Article 1 in so far as it is continuing to produce effects.

Article 3

1. Spain shall take all necessary measures to recover from the recipients the aid referred to in Article 1, which has been unlawfully made available to them.
Spain shall cancel all payment of outstanding aid.
2. Recovery shall be effected without delay in accordance with the procedures of national law, provided these allow the immediate and effective implementation of this Decision. The sums to be recovered shall bear interest from the date on which they were available to the recipients until their actual recovery. Interest shall be calculated on the basis of the reference rate used for calculating the grant equivalent of regional aid.

Article 4

Spain shall inform the Commission, within two months of the date of notification of this Decision, of the measures taken to comply with it.

Article 5

This Decision is addressed to the Kingdom of Spain.
Done at Brussels, 11 July 2001.
For the Commission
Mario Monti
Member of the Commission
(1) OJ C 351, 4.12.1999, p. 29.
(2) Commission Decision 1999/718/EC (OJ L 292, 13.11.1999, p. 1).
(3) Commission Decision 2000/795/EC (OJ L 318, 16.12.2000, p. 36).
(4) OJ L 83, 27.3.1999, p. 1.
(5) See footnote 1.
(6) Boletín Oficial de Guipúzcoa, 17.3.2000.
(7) Tenth additional provision.
(8) Boletín Oficial de Guipúzcoa, 31.12.1997.
(9) No precise definition is given of what the Spanish authorities understand by "investments made during the preparatory phase" for the purposes of applying the tax aid in question.
(10) See point 3.2 of the Community guidelines on State aid for small and medium-sized enterprises (OJ C 213, 19.8.1992) and the Commission notice on the de minimis rule for State aid (OJ C 68, 6.3.1996).
(11) See the Annex to the Commission communication on regional aid systems (OJ C 31, 3.2.1979).
(12) See point 18 of the Annex to the Commission communication on regional aid systems (OJ C 31, 3.2.1979) or point 4.4 of the guidelines on national regional aid (98/C 74/06).
(13) Commission notice on the application of the State aid rules to measures relating to direct business taxation (OJ C 384, 10.12.1998).
(14) Commission letter to Member States SG(89) D/5521 of 27 April 1989.
(15) Decision 93/337/EEC (OJ L 134, 3.6.1993).
(16) See Joined Cases C-278/92, C-279/92 and C-280/92 dated 14 September 1994, Spain v Commission, [1994] ECR I-4103.
(17) The deadline for submitting comments was one month from the date of publication of the notice in the Official Journal of the European Communities, i.e. 26 February 2000.
(18) See Case 248/84 dated 14 October 1987, Germany v Commission, [1987] ECR 4013.
(19) Patxi Garrido Espinosa and Maria Victoria García Olea, "La dependencia exterior vasca en el periodo 1990-1995", Euskal Estatistika-Erakundea/Instituto Vasco de Estadística (Eustat), the statistical office of the Basque Government.
(20) Exports abroad accounted for 28,5 % of total exports (including sales to the rest of Spain) in 1990, and for 40,8 % five years later in 1995.
(21) "Estadística de Comercio Exterior para la Comunidad Autónoma de Euskadi en el año 1998", prepared by Eustat.
(22) See judgment by the Court of Justice on 17 June 1999 in Case C-75/97 ("Maribel"), Belgium v Commission, paragraphs 48 and 51; the judgment rendered by the Court of First Instance on 15 June 2000 in Case T-298/97, Alzetta Mauro and others v Commission, paragraphs 80 to 82; the opinion of Advocate General Ruíz-Jarabo dated 17 May 2001 in Case C-310/99, Italy v Commission, paragraphs 54 and 55; and the opinion of Advocate General Saggio, dated 27 January 2000, in Case C-156/98, Germany v Commission, paragraph 31, which ran thus: "It should be pointed out in this respect that, with regard to a general aid scheme, to be able to determine the effect of that scheme on trade, it is sufficient if, from an ex ante assessment, it can reasonably be considered that the said effect may come about." If the position of a firm (or, as in the present case, an indefinite number of firms) is reinforced by an aid scheme, this privilege may in principle affect competition between Member States.
(23) For example, the "Plan General de Contabilidad".
(24) For example, the "Ley de Sociedades Anónimas".
(25) See the judgment dated 22 March 1977 in Case C-78/76, Steinike & Weinlig v Federal Republic of Germany, paragraph 24. On the other hand, Case C-313/90, Comité international de la rayonne et des fibres synthétiques and others v Commission, paragraph 45 of the judgment dated 24 March 1993, states that 'neither the principle of equal treatment nor that of the protection of legitimate expectations may be relied upon in order to justify the repetition of an incorrect interpretation of a measure'.
(26) Article 31 of the Spanish Constitution.
(27) See the sixth paragraph of judgment 411/99 of 17 May 1999 of the High Court of the Basque Country (Tribunal Superior de Justicia del País Vasco) in Case C-907/98, Administración del Estado v Juntas Generales de Álava.
(28) The result of the assessment of the aid is the same, whether that assessment is based on the Commission notice on the de minimis rule for State aid (OJ C 68, 6.3.1996) or on Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the Treaty to de minimis aid (OJ L 10, 13.1.2001, p. 3).
(29) At no time during the period of validity of the scheme in question was any such exemption regulation in force.
(30) See paragraph 300 of the judgment rendered by the Court of First Instance of 15 December 1999 in joined Cases T-132/96 and T-143/96, Freistaat Sachsen and others v Commission, [1999] ECR II-3663.
(31) Per capita gross domestic product (GDP) measured in purchasing power standards (PPS).
(32) Nomenclature of territorial units for statistics.
(33) The references to the regional rules are, in some of the subsequent recitals, to the guidelines on national regional aid (98/C 74/06) or to the earlier rules. In any event, the result of the assessment is the same in all cases.
(34) See point 1 of the Commission communication to the Member States on the method for the application of Article 92(3)(a) and (c) to regional aid (OJ C 212, 12.8.1988) and point 3.5 of the guidelines on national regional aid (98/C 74/06).
(35) See 96/C 25/03.
(36) For the purposes of the Community guidelines on State aid for small and medium-sized enterprises (OJ C 213, 19.8.1992) or the Commission recommendation of 3 April 1996 concerning the definition of small and medium-sized enterprises (96/C 213/04).
(37) Community guidelines on State aid for small and medium-sized enterprises (OJ C 213, 19.8.1992) or Community guidelines on State aid for small and medium-sized enterprises (96/C 213/04) (OJ C 213, 23.7.1996).
(38) See the Annex to the Council resolution of 20 October 1971 (OJ C 111, 4.11.1971), point 5(c); the Annex to the Commission communication on regional aid systems (OJ C 31, 3.2.1979), point 18; the Community guidelines on State aid for small and medium-sized enterprises, point 4.2.1; or the guidelines on national regional aid (98/C 74/06) (OJ C 74, 10.3.1998), point 4.4 ("initial investment means an investment in fixed capital relating to the setting-up of a new establishment, the extension of an existing establishment, or the starting-up of an activity involving a fundamental change in the product or production process of an existing establishment (through rationalisation, diversification or modernisation)"), point 4.5 ("aid for initial investment is calculated as a percentage of the investment's value. This value is established on the basis of a uniform set of items of expenditure (standard base) corresponding to the following elements of the investment: land, buildings and plant/machinery") and footnote 23 ("in the transport sector, expenditure on the purchase of transport equipment (movable assets) cannot be included in the uniform set of items of expenditure (standard base). Such expenditure, therefore, is not eligible for aid for initial investment").
(39) See the Annex to the Commission communication on regional aid systems (OJ C 31, 3.2.1979).
(40) Footnote 21 in the guidelines on national regional aid (98/C 74/06) states that "replacement investment is thus excluded from the concept. Aid for this type of investment falls within the category of operating aid, to which the rules described at points 4.15 to 4.17 apply".
(41) It should be stressed that neither the Spanish authorities nor the third parties, which submitted comments, denied the existence of this type of investment expenditure.
(42) Commission communication to the Member States on the method for the application of Article 87(3)(a) and (c) to regional aid (OJ C 212, 12.8.1988).
(43) It is not in the list of outermost regions in Article 299 of the Treaty.
(44) According to point 3.10.4 of the guidelines on national regional aid (98/C 74/06).
(45) For the sectoral rules currently in force see, in addition to the Official Journal of the European Communities, the website of the Directorate-General for Competition http://europa.eu.int/comm/ competition/state_aid/legislation/
(46) OJ C 107, 7.4.1998.
(47) OJ C 288, 9.10.1999. These guidelines have since 1999 replaced a previous version (94/C 368/05) of the same guidelines (OJ C 368, 23.12.1994).
(48) Among other things, that the aid is conditional on implementation of a restructuring plan which enables the long-term viability of the firm to be restored.
(49) In the case of tax credits granted under Provincial Law No 22/1994 of 20 December 1994, the period in which they may be used is limited to nine years. Tax credits granted under subsequent provincial laws are no longer subject to any such limitation.
(50) Commission letter to Member States SG(91)D/4577 of 4 March 1991. See also Case 142/87, Belgium v Commission, [1990] ECR I-950.
(51) In the case of tax credits granted under Provincial Law No 22/1994 of 20 December 1994, the period in which they may be used is limited to nine years. Tax credits granted under subsequent provincial laws are no longer subject to any such limitation.
(52) Commission letter to Member States SG(91) D/4577 of 4 March 1991. See also Case 142/87, Belgium v Commission, [1990] ECR I-950.

Cite this act