2003/192/EC: Commission Decision of 20 December 2001 on a State aid scheme implemented by Spain in 1993 for certain newly established firms in Guipúzcoa (Spain) (notified under document number C(2001) 4448) (Text with EEA relevance)

• Articles: 5

Article 1

The state aid in the form of an exemption from corporation tax, unlawfully put into effect by Spain in the Historic Territory of Guipúzcoa, in breach of Article 88(3) of the Treaty, through Article 14 of Provincial Law No 18 of 5 July 1993, is incompatible with the common market.

Article 2

Spain shall abolish the aid scheme referred to in Article 1, if it is still in force.

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 aid to be recovered shall include interest from the date on which it became available to the recipients until the date of its effective 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, 20. December 2001

For the Commission

Mario Monti

Member of the Commission

(1) OJ C 37, 3.2.2001, p. 38.

(2) See footnote 1.

(3) Boletín Oficial del Territorio Histórico de Guipúzcoa No 128, 8.7.1993.

(4) Only the parts of relevance to the assessment of the aid are cited.

(5) See Commission Decision 1999/718/EC of 24 February 1999 concerning State aid granted by Spain to Daewoo Electronics Manufacturing España SA (Demesa), (OJ L 292, 13.11.1999, p. 1).

(6) See point 3.2 of the Community guidelines on State aid for small and medium-sized enterprises (SMEs) (OJ C 213, 19.8.1992, p. 2) and 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. 30).

(7) See point 3.2 of the Community guidelines on State aid for small and medium-sized enterprises (see footnote 6) and the Commission notice on the de minimis rule for State aid (see footnote 6).

(8) As alleged evidence of this letter, the Guipúzcoa Provincial Council attached to its comments a copy of a document bearing the letterhead of the Department of Finance and Public Administration of the Basque Government and not of the Tax Coordination Authority; it was not dated or signed. The document was never registered in the Commission.

(9) See Case C-82/84 Germany v Commission, [1984] ECR 1451, paragraph 12.

(10) Annex 1 to the Conclusions of the ECOFIN Council of 1 December 1997, (OJ C 2, 6.1.1998, p. 1).

(11) Communication from the Commission to the Council and the European Parliament, COM(1998)595 final, 25.11.1998.

(12) Point 14 of the communication mentioned in the above footnote.

(13) OJ C 384, 10.12.1998, p. 3.

(14) OJ L 83, 27.3.1999, p. 1.

(15) Report by the "Code of Conduct Group", submitted to the ECOFIN Council of 29 November 1999, point D009: "Basque Country - Start-up aid".

(16) OJ C 31, 3.2.1979, p. 9. According to the communication, "aids linked to initial investment" means aids linked and fixed directly in relation to initial investment or jobs created.

(17) OJ C 74, 10.3.1998, p. 9. See footnote 46 in Annex I of the guidelines: "Tax aid may be considered to be aid connected with an investment where it is based on an amount invested in the region".

(18) See previous footnote.

(19) Opinion of Advocate-General Saggio in Joined Cases C-400/97, C-401/97 and C-402/97, Administración General del Estado v Juntas Generales de Guipúzcoa y Diputación Foral de Guipúzcoa.

(20) See its judgement of 7 February 1998.

(21) See the judgements of 30 September and 7 October 1999 concerning the "tax holidays" in the form of reductions of taxable income of 99 %, 75 %, 50 % and 25 %.

(22) "Law No 22 of 29 December 1993, on tax measures and the reform of the legal system of the public service and unemployment protection".

(23) OJ L 134, 3.6.1993, p. 25.

(24) Judgment of the Court of Justice of the European Communities of 24 November 1987, in Case C-223/85, RSV v Commission, [1987] ECR 4617.

(25) See Judgment of the Court of Justice of the European Communities of 19 May 1993, in Case C-198/1991, William Cook plc v Commission, [1993] ECR I-2487.

(26) Joined Cases C-278/92, C-279/92 and C-280/92, Spain v Commission, [1994] ECR I-4103.

(27) Decision of 10 May 1993 on Provincial Laws 28/1988 (Álava), 8/1988 (Vizcaya) and 6/1988 (Guipúzcoa); Commission Decision 1999/718/EC (Daewoo) (see footnote 5) and Decision 2000/795/EC (Ramondín SA and Ramondín Cápsulas SA) (OJ L 318, 16.12.2000, p. 36).

(28) See section III: "Comments of the Spanish authorities".

(29) See Judgment of the Court of Justice of 14 October 1987, in Case C-248/84, Germany v Commission, [1987] ECR 4013.

(30) Case C-387/92, Banco de Crédito Industrial, now Banco Exterior de España SA v Ayuntamiento de Valencia, [1994] ECR I-877, paragraph 14.

(31) Patxi Garrido Espinosa and Ma Victoria Garcia Olea, "La dependencia exterior vasca en el periodo 1990-1995", Eustat.

(32) In 1990 exports accounted for 28,5 % of total sales, including those to the rest of Spain, but for 40,8 % only five years later.

(33) "Estadística de Comercio Exterior para la Comunidad Autónoma de Euskadi en el año 1998", prepared by Eustat (Euskal Estatistika-Erakundea/Instituto Vasco de Estadística).

(34) See Case C-75/97, (Maribel) Belgium v Commission, [1999] ECR I-3691, paragraphs 48 and 51; Joined Cases T-298/97, T-312/97, T-313/97, T-315/97, T-600/97 to 607/97, T-1/98, T-3/98 to T-6/98 and T-23/98, Alzetta Mauro and others, [2000] ECR II-2319, paragraphs 80, 81 and 82; the Opinion of Advocate-General Ruíz-Jarabo in Case C-310/99, Italy v Commission, paragraphs 54 and 55 (17 May 2001), and the Opinion of Advocate-General Saggio in Case C-156/98, Germany v Commission, paragraph 31 (27 January 2000), 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".

(35) With regard to the complaint submitted by Schütz Ibérica SA, the Spanish authorities informed the Commission that no aid had been paid to Detursa at that date.

(36) Section B of the Code of Conduct for Business taxation reads: "[...] When assessing whether such measures are harmful, account should be taken of, inter alia: (1) whether advantages are accorded only to non-residents or in respect of transactions carried out with non-residents, or (2) whether advantages are ring-fenced from the domestic market, so they do not affect the national tax base, or (3) whether advantages are granted without any real economic activity or substantial economic presence within the Member State offering such tax advantages, or (4) whether the basis of profit determination in respect of activities within a multinational group of companies departs from internationally accepted principles, notably those agreed upon within the OECD, or (5) whether the tax measures lack transparency, including where statutory rules are relaxed at administrative level in a non-transparent way".

(37) Enterprises in Europe, Fourth Report, Eurostat.

(38) Data taken from the table on page 27 of the report.

(39) Data taken from the table on page 152 of the report.

(40) Enterprises in Europe, Fifth Report, Eurostat.

(41) Data taken from the table on page 31 of the report.

(42) Data taken from the table on page 224 of the report.

(43) Data taken from the table on page 73 of the report.

(44) See Judgment of the Court of First Insance in Case T-55/99, Confederación Española de Transporte de Mercancías (CETM) v Commission, [2000] ECR II-3207, paragraph 40.

(45) See paragraph 27 of the Opinion of Advocate-General Ruíz-Jarabo in Case C-6/97.

(46) See paragraph 53 of the judgment cited in footnote 45.

(47) See France: tax aid scheme for "enterprise areas" N 155/86, approved by Commission decision of 21 January 1987, Seventeenth Competition Report, point 245; Regional Planning Act aid scheme N 493/95, approved by Commission decision of 29 November 1995, OJ C 53, 22.2.1996; Italy: aid scheme pursuant to Law No 64 of 1 March 1986 on special assistance for the Mezzogiorno, approved by Commission decision of 2 March 1988 (OJ L 143, 10.6.1988); Luxembourg: Regional Planning Act aid scheme N 607/92, approved by Commission decision of 9 December 1992 (OJ C 39, 13.2.1993); regional aid map assistance scheme N 72/96, approved by Commission decision of 20 September 1996, OJ C 51, 21.2.1997; regional aid scheme for economic development N 793/B/99, approved by Commission decision of 19 July 2000 (OJ C 278, 30.9.2000).

(48) See Case C-78/76, Steinike & Weinlig v Federal Republic of Germany, [1977] ECR 141, paragraph 24. On the other hand, Case C-313/90, Comité International de la rayonne et des fibres synthétiques and others v Commission, [1993] ECR I-1125, paragraph 45, 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".

(49) Article 1(b) (i) to (iv) of Regulation No 659/1999 read as follows:

"(b) 'existing aid' shall mean:

(i) all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;

(ii) authorised aid, that is to say, aid schemes and individual aid authorised by the Commission or by the Council;

(iii) aid which is deemed to have been authorised pursuant to Article 4(6) of this Regulation or prior to this Regulation but in accordance with this procedure;

(iv) aid which is deemed to be existing aid pursuant to Article 15."

(50) Article 1(b)(v) of Regulation (EC) No 659/1999 reads as follows:

"(b) 'existing aid' shall mean:

(...)

(v) aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation".

(51) Decision to initiate the formal investigation procedure in Article 93(2) in respect of certain aid granted to Demesa, Álava (OJ C 103, 4.4.1998, p. 3).

(52) In Article 1(c) of Regulation (EC) No 659/1999, new aid is defined as "(c) 'new aid': all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid".

(53) Letter to the Spanish Permanent Representation, D/10687, dated 19 January 1996.

(54) The assessment of the aid is the same whether it is based on the Community guidelines on State aid for small and medium-sized enterprises (SMEs), the Commission notice on the de minimis rule for State aid or Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid (see footnote 6).

(55) Joined Cases T-132/96 and T-143/96, Freistaat Sachsen and others v Commission, [1999] ECR II-3663, paragraph 300.

(56) The measures consisted basically in 95 % relief of the tax on capital transfers and documented legal acts, a 20 % tax credit in respect of investments, complete freedom as to the depreciation of assets constituting new investments, an increase in the tax credit up to 5 % of the investment, depending on the employment created, and an increase in the tax credit up to 20 % of the investment in the case of investments of special technological interest.

(57) See Article 1(4) of Decision 93/337/EEC: "Within two months of the notification of this decision, the Spanish authorities shall ensure that the aid is granted within the national regional aid areas and ceilings or in accordance with the conditions laid down in the Community guidelines on State aid for small and medium-sized enterprises, in compliance with the Community rules on the cumulation of aid for different purposes and with the limits laid down for certain sectors of activity in industry, agriculture and fisheries".

(58) See footnote 23.

(59) Nomenclature of territorial units for statistics.

(60) Per capita gross domestic product (GDP) measured in purchasing power standards (PPS).

(61) The references to the regional rules are confined, in the following recitals, to the guidelines on national regional aid (see footnote 17). Where the aid was granted before the guidelines came into force, the Commission's assessment is based on the rules current at the time it was granted. Nevertheless, since the relevant parts of the said rules have not changed, it is sufficient to refer to the latest text in this case.

(62) See point 3.5 of the guidelines on national regional aid (see footnote 17).

(63) The successive regional aid maps that have applied since Spain's accession were the one adopted in 1988 in Commission Decision 88/C 351/04, the amended map (see communication 96/C 25/03) in the decision of 26 July 1995, and the map for 2000 to 2006 adopted in the decision of 11 April 2000.

(64) It is not in the list of outermost regions in Article 299 of the Treaty.

(65) See point 3.10.4 of the guidelines on national regional aid (see footnote 17).

(66) For the sectoral rules currently in force see, in addition to the Official Journal of the European Union, the website of the Directorate-General for Competition: http://europa.eu.int/comm/ competition/state_aid/legislation/.

(67) See Case C-5/89, Germany v Commission, [1990] ECR I-3437, paragraph 14; Case C-169/95, Spain v Commission, [1997] ECR I-135, paragraph 51; Case C-24/95, Land Rheinland-Pfalz v Alcan Deutschland GmbH, [1997] ECR I-1591, paragraph 25.

(68) See paragraph 16 of the judgment cited in footnote 71, and Case C-183/91, Commission v Greece, [1993] ECR I-3131, paragraph 18.

(69) Decision to raise no objection or to initiate the formal investigation procedure.

(70) Decision to terminate the formal investigation procedure.

(71) See footnote 24.

(72) State aid file on aid to Demesa (see footnote 52); final Decision 1999/718/EC (see footnote 5).

(73) State aid file on aid to Ramondín: Decision to initiate the procedure, 30 March 1999 (OJ C 194, 10.7.1999, p. 18); final Decision 2000/795/EC (see footnote 27).

(74) State aid cases C 49/99, C 50/99 and C 52/99 relating respectively to the tax aid schemes (tax holidays) introduced by Article 26 of the following provincial laws: Provincial Law No 24 of 5 July 1996 (Álava), Provincial Law No 7 of 4 July 1996 (Guipúzcoa) and Provincial Law No 3 of 26 June 1996 (Vizcaya).

(75) See paragraph 300 of the judgment cited in footnote 56.

(76) Commission letter to Member States SG(91) D/4577, 4 March 1991. See also Case C-142/87, Belgium v Commission, [1990] ECR I-959.