European Commission decision on the Spanish tax lease
After a complicated legal and political process, on July 17 the European Commission adopted the final decision in the formal investigation into the so-called Spanish tax lease.
According to its press release, the Commission took the view that the Spanish tax lease scheme for the purchase of ships had bestowed an unfair competitive advantage on the members of the Economic interest Groupings (EIGs) created to finance the building and acquisition of ships. Accordingly, Spain must now recover the state aid (net tax advantage) obtained by those investors, which are the only ones considered to have been the beneficiaries of the state aid (and not, therefore, the shipyards or ship owners/shipping companies). However, the Commission considered that the part of the scheme relating to the potential advantages for shipping companies would have been compatible, to the maximum extent permitted under the Community Guidelines on state aid for shipping.
The Commission also stated that the beneficiaries of the aid could not pass on their repayment obligations to third parties (such as the shipyards) under existing contracts, as this would run counter to the beneficial effect of the state aid legislation.
Nevertheless, in the view of the Commission, pursuant to the general principles of Community law (legitimate expectation), they should not be required to repay the incompatible aid granted before April 30, 2007, when a final decision was adopted on the French tax lease scheme, which was similar to the Spanish scheme.
As is well known, European Commission state aid decisions can be appealed before the General Court of the European Union, both by the state in which the aid was received (in this case, Spain) and by the private operators or undertakings that are directly affected by the decision.
Garrigues Tax Department
