Commissie onderzoekt fiscale stimuleringsmaatregelen Italië aan productpresentaties op beurzen in het buitenland (en)

The Commission decided to launch two in-depth probes into fiscal incentives for newly listed companies and companies taking part into trade fairs abroad. Both measures are set forth in the accompanying law to the 2004 budget. The scheme in favour of newly listed companies provides that undertakings listed on a European regulated stock exchange between 2 October 2003 and 31 December 2004 benefit from a reduced corporate tax rate for three years. They will also be able to deduct expenses incurred in order to obtain a listing on the stock exchange from their taxes. The scheme in favour of companies taking part in trade fairs abroad allows companies to deduct expenses arising from their participation in trade fairs from their taxes. Both probes aim to establish whether these fiscal advantages that are limited to a narrowly described category of undertakings are liable to distort competition.

According to the Commission's preliminary findings, the schemes provide reduction in corporate taxes in favour of a narrowly circumscribed set of undertakings.

The scheme for newly listed companies

The scheme favouring newly listed companies grants its beneficiaries a 20 percent corporate tax rate in lieu of the 33 percent which is usually applicable in Italy. This reduced rate will apply for the three fiscal years following the stock exchange listing of the company in Europe. In addition, the newly listed companies will be able to deduct the costs incurred in obtaining a listing. This would include the cost of executing a due diligence, the cost for consultant's advice and the regulatory cost of listing a company on the stock exchange.

Only companies that increase their net capital by at least 15% as a result of their initial public offering (IPO) qualify for the special tax treatment. In addition, only companies that obtain their first listing on an European stock exchange qualify. According to the Italian authorities, only ten companies are expected to qualify in 2003. No exact figures on the companies expected to qualify in 2004 have been submitted at this stage.

At this stage, the Commission's preliminary assessment would classify the special tax treatment of newly listed companies as a form of operating aid which exonerates these companies from costs which all its competitors, be they Italian-based or based in other Member States must bear.

Given the probable effects of the measure on the initial stock price of the beneficiaries being listed, the Commission has asked Italy to inform all interested parties about the current State aid probe.

The scheme for companies taking part in trade fairs

The scheme in favour of undertakings taking part in trade fairs abroad allows participants in these fairs to deduct the costs involved of participating in trade fairs from their taxable income. Such cost may include advertising and promotion cost and the cost of displaying products at trade fairs.

The objective of this tax advantage is to improve the trading conditions of Italian companies abroad, including in other Member States. Such measures, at first sight, do not appear to be compatible with fair competition in the single market.

The two probes invite the Italian Government and interested third parties to submit their comments on the two measures.

Background

In late 2003, the Commission's attention was drawn to a publication in the Italian Official Journal of an urgent decree providing immediately effective tax incentives to stimulate the Italian economy, being part of the 2004 budget package. Mindful of the possible distortions deriving from the proposed incentives, the Commission engaged immediate discussions with the Italian authorities with a view to rendering the incentives conditional upon a prior Commission approval for State aid purposes. The Commission interest on this package is justified by the concern that the incentives in question might be specifically targeted at strategic sectors of the Italian economy and could therefore determine a grave distortion of competition.

Following initial contacts with the Commission, Italy converted two of the schemes at hand into law. The schemes respectively include corporate tax incentives in favour of newly listed companies and of companies taking part into trade fairs abroad. As a result, the Commission included the two measures in the register of non notified aid and began preliminary review.