EU Commission opens investigation into Polish tax incentive for shipyards

EPA / Jerzy Undro

Two Polish icebreakers sail through ice on the river Oder near the village Widuchowa, Northwestern Poland, 14 February 2012.

EU Commission opens investigation into Polish tax incentive for shipyards


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The EU’s competition watchdog has announced on Monday the opening of an investigation into tax incentives for shipyards in Poland.

The EU watchdog said there were concerns, whether the scheme would give an unfair advantage to companies, as under the scheme that Poland has put forward, shipmakers can pay a flat-rate tax on sales from the building and conversion of ships.

“The Commission will now investigate further to determine whether its initial concerns are confirmed,” the Berlaymont said.

According to the statement of the Commission, such a measure could be classified as an “operating aid”, breaking EU competition law. “Generally speaking, operating aid is not allowed under EU State aid rules, because it distorts competition on the merits without serving any objective of common EU interest,” said the European Commission.

As for the Police case in particular, the Commission is concerned that the aid would harm shipyards in the EU, which are not eligible under the Polish tax scheme, while the EU watchdog assessed the aid as unnecessary, given that there are shipyards in Poland which are able to compete on the market on their own merits.

However, this does not mean that Poland cannot intervene in its shipbuilding industry, as research, development and innovation or regional aid, are allowed under EU State aid rules, plus they are considered to be more effective while distorting the market less than operating aid.

The approval of the Polish investment aid to SMEs in the shipbuilding sector approved at the same day, is a fine example, according to the EU executive, unlike the proposed flat-rate sales tax, that is not the same.

The Commission’s approval on the Polish regional investment aid scheme, will give Poland the opportunity to support SMEs in the shipbuilding sector in Pomorskie and Zachodniopomorskie regions, in the form of grants, interest-rate subsidies and guarantees, with an overall budget is around €18 million, through the regional aid scheme.

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