The port system in France (fishing ports, commercial ports and marinas) consists of ports belonging to the State (the major seaports (grands ports maritimes — ‘GPMs’), formerly known as ‘autonomous ports’, and the major inland ports, in particular the autonomous ports of Paris and Strasbourg) and ports belonging to local and regional authorities. Although France indicates that the measure at issue focuses on the fishing ports and commercial ports, marinas may in fact be operated by entities covered by the corporate tax exemption (such as the CCIs) and are therefore also concerned by the procedure.

The State is responsible for the operation of the GPMs. They are assigned a public accountant, and they are audited by government officials. France states that, since the reform of 2008, which transferred handling activities to the private sector, the tasks of the GPMs have been redirected to security, safety and port police activities and to tasks relating to the renovation of the port area. The ports are henceforth owners of the area they occupy.

The autonomous inland ports, i.e. the autonomous port of Paris and the autonomous port of Strasbourg, are operated by State public institutions. The other inland ports are managed by concessionaires (CCIs in general).

Pursuant to Article 205, Article 206(1) and Article 1654 of the General Tax Code (Code général des impôts — ‘CGI’), legal persons governed by private or public law engaging in a business or transactions of a profit-making nature are subject to corporate tax. Second, pursuant to Article 165 of Annex 4 to the CGI, public institutions of an industrial or commercial nature are subject to all direct taxes and equivalent taxes applicable to similar private undertakings. Article 167 of Annex 4 to the same Code specifies that these provisions apply in particular to ‘chambers of commerce and industry’ and to ‘autonomous ports’ (which became major seaports in 2008, with some exceptions, such as the autonomous inland ports of Paris and Strasbourg).

Certain operators of French seaports and representatives of port managers, principally the GPM of Le Havre, the CCI of Brest and the UPF, consider that ports are not ‘undertakings’ within the meaning of Article 107(1) TFEU. The French authorities share this reasoning and add that the ports ‘are not undertakings like others’, but ‘operators at the service of other undertakings’ and that ‘the fact that the Treaty on the Functioning of the European Union has provided for an ad hoc article [Article 93] to deal with State aid in the transport sector, shows that the European legislator wished to take this particularity into account’.

Several operators of French seaports and the representatives of operators of inland ports consider that the measure at issue compensates for the tasks assigned to ports by the public authorities. The GPM of Dunkirk maintains that the cost of these tasks systematically exceeds the theoretical corporate tax charge. Accordingly, the tax exemption does not confer an economic advantage on ports.

The French authorities and several operators of French seaports consider that the measure is not selective since it applies to all French ports and that it has formed an integral part of the French tax system for over 70 years.

They add that the Commission has not proved how the ports are in a factual and legal situation comparable to that of other companies, and argue that the ports, under national law, provide the operating conditions necessary for transport operators to carry out their tasks, without competing with or substituting themselves for the latter, and must carry out tasks constituting public service obligations or an exercise of the official powers of a public authority. The GPM of Le Havre specifies that the large share of port charges in the budget of the ports, the extent of State control over the GPMs, and the fact that there are no ‘operators acting under normal economic conditions … in view of the legal monopoly exercised by the GPMs over the management of the ports’ differentiates them from other operators. For the Brittany region, the fact that certain small ports are managed by CCIs shows that they are in a different situation.

The CCI of Brest, which is the manager of the port of Brest, and the GPM of Le Havre state that the basis of the corporate tax exemption for ports is Article 165 of Annex 4 to the CGI, because the ports do not engage in profit-making activities of a nature to be subject to corporate tax. Thus, the ministerial decisions of 11 August 1942 and 27 April 1943 are merely the confirmation of the application to ports of the general provisions of Article 165 of Annex 4 and Articles 205 and 206 of the CGI.

The French authorities and several operators of French seaports argue that the Commission has not demonstrated any restriction on competition, whereas the traffic in which there is competition is small and the attractiveness of a port is measured by a very large number of parameters (the performance of the other links of the logistics chain) on which subjecting ports to corporate tax will have no impact. The AFPI considers that, in contrast to the seaports, the inland ports are not in competition with one another as their hinterlands are far smaller and separate.

Several interested parties consider that the overseas ports do not have the capacity to compete with the ports of other Member States.

For the French authorities and several interested parties, subjecting the French ports to corporate tax now would in fact lead to a distortion of competition between European ports, as the States all apply different taxation rates. They add that a large number of States provide financial assistance for their ports under a variety of tax or other arrangements.

The port of Rotterdam considers that, for the Dutch ports, corporate tax will represent a considerable cost in 2017 which their competitors, and especially the ports of Dunkirk and Le Havre, do not have to pay.

The French authorities and several operators of French ports argue that the exemption at issue is in all cases compatible with the internal market as it allows compensation for certain tasks financed by the ports, constituting an exercise of the official powers of a public authority (tasks related to the harbourmaster's office, dredging of port accesses, maintenance work for coastal defences, land access, protection of the environment and security and safety). Since the amount of corporate tax from which each port is exempted does not exceed the amount of the costs arising from the exercise of the official powers of a public authority, and is even well below this latter amount, the exemption is compatible with the internal market.

The representatives of the inland port managers emphasise that the inland ports play an important role in the development of multimodal transport, that the investments made by the ports fall within the scope of Article 93 TFEU (coordination of transport) and that the corporate tax exemption also falls within the scope of Article 107(3)(b) TFEU concerning important projects of European interest, such as Seine Northern Europe and the trans-European transport corridors. The AFPI specifies that Article 93 TFEU could be applicable in that it provides for the ‘reimbursement for the discharge of certain obligations inherent in the concept of a public service’.

The port of Rotterdam asks the Commission to postpone subjecting the Dutch ports to corporate tax until a sector inquiry has been carried out and all the seaports in the north European range (ports on the southern coast of the North Sea) become subject simultaneously to the tax or, at the very least, to subject the Belgian and French ports to corporate tax rapidly and simultaneously.

According to Article 107(1) TFEU, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.

It is for the Member State concerned to demonstrate that a State aid measure can be regarded as compatible with the internal market. As a basis for the compatibility of the measure, the French authorities rely only on compensation for certain tasks carried out by the ports, referring to Article 106(2) TFEU, and on Article 107(3)(a) TFEU; certain interested parties also invoke Articles 93 (coordination of transport) and Article 107(3)(b) TFEU (important projects of European interest).

Second, Article 93 TFEU stipulates that aids which meet the needs of coordination of transport or represent reimbursement for the discharge of certain obligations inherent in the concept of a public service can also be declared compatible with the internal market. Although, as the representatives of managers of French inland ports stress, the inland ports play a major role in the development of multimodal transport, not all the investments made by the ports are covered by Article 93 TFEU, which is limited to aids which meet the needs of coordination of transport. The corporate tax exemption does not constitute investment aid, but operating aid which is not targeted at investment. The measure favours undertakings making the most profit and therefore having greater capacity to accumulate profit and hence to finance investments. Nor is the measure targeted at the reimbursement of certain obligations inherent in the concept of a public service, as pointed out above. Moreover, the advantage derived from a tax exemption pure and simple is not limited to the amount needed for coordination of transport or for reimbursement for the discharge of certain obligations inherent in the concept of a public service, and therefore does not guarantee compliance with the principle of proportionality. It has no clearly identified incentive effect either, in particular because the exemption is more beneficial to the most profitable ports, which therefore have the most resources — and the least need of incentives. Consequently, Article 93 TFEU is not applicable.

Third, according to Article 107(3)(b) TFEU, aid to promote the execution of an important project of common European interest can also be declared compatible with the internal market. The representatives of the managers of French inland ports consider in general that the corporate tax exemption comes within the scope of this article. For the same reasons as above, it is not possible to concur with this reasoning. The measure at issue is not targeted at the execution of an important project of European interest and is not proportionate to the costs of such a project. It is an advantage benefiting the ports merely in so far as they make profits, the fact that they contribute to an important project of common European interest being irrelevant in this respect.

Fourth, in accordance with Article 107(3)(a) TFEU, aid to promote ‘the economic development … of the regions referred to in Article 349 TFEU, in view of their structural, economic and social situation’ may be considered compatible with the internal market. This stipulation is invoked by the French authorities and several overseas interested parties with regard to the ports located overseas. However, the measure at issue is not targeted at the regions in question.

Consequently, the measure examined cannot be declared compatible with the internal market on the basis of Article 107(3)(a) TFEU.

Fifth, and although Article 107(3)(c) has not been invoked either by France or by the interested parties, the Commission will consider whether the measure at issue is of a nature to ‘facilitate the development of certain economic activities or of certain economic areas’ without adversely affecting trading conditions to an extent contrary to the common interest. For the reasons already set out above, however (absence of proportionality, absence of incentive effect and absence of a link with an identified common interest objective), the Commission takes the view that Article 107(3)(c) TFEU is not applicable.

In accordance with Article 1(b)(i) of the Procedural Regulation, aid schemes that were put into effect prior to the entry into force of the Treaty are existing aid schemes.

Since the tax exemption in question entered into force in 1942 and has not undergone any substantial changes since then, the Commission considers that the measure constitutes existing State aid.