Given the latest news published about the tax lease and the European Commission’s imminent decision regarding the requirement to return the amounts received by the shipowners and shipbuilders under the previous tax scheme, San Simón & Duch would like to take the opportunity to make clear their concerns on the matter in relation to two points:
Firstly, “it is being taken for granted that the European Commission has reached a decision when that is not the case”, notes Mercedes Duch, a partner of San Simón & Duch. The content and scope of the decision will determine whether the much feared requirement to repay the aid previously received is applied or not.
According to the maritime lawyer, it has been assumed in the legal world since 2005 that the previous tax lease scheme would eventually be considered to be contrary to European State Aid rules. However Duch makes it clear that this situation “does not necessarily imply that the aid received would have to be repaid”.
Duch adds that it must be taken into account that the tax lease was not “aid” given by Europe, but rather that it was a tax scheme adopted in Spain by the then Spanish government, applying all legal procedures. What is being dealt with here is not the “repayment” of what the EU gave to the sector, but that the tax legislation approved by the then Government should be held to be illegal under European rules and, therefore, the situation should be returned to how it was before the national laws establishing the Spanish Tax Lease scheme were passed.
For this reason Mercedes Duch recommends prudence and says that “it is necessary to wait and carefully study the decision from Europe”, possibly to be announced on 17 July, in order to be able to analyse the consequences for the ship building industry.
The second point concerns those who would be responsible for the eventual or potential “repayment” of the aid. “If we follow the statements of Commissioner Almunia”, said the San Simón & Duch partner, the shipbuilders and the banks, two of the “legs” of the tax lease system, would appear to be exempt.
Mercedes wonders therefore if “the finger is pointing at the shipowners and other investors, including those from outside the maritime industry”.
What cannot be ignored is that a tax lease regime is still in force, and that it “continues to be one of the sources of finance for the shipbuilding industry”. “It’s a different regime”, Duch notes, but it is “indispensable”.
In the opinion of the San Simón & Duch partner, “legal certainty requires that the European institutions recognise and approve the current scheme, in order not to repeat errors [made with the previous scheme] and their severe consequences”.
In France a similar situation occurred -arising from the incompatibility of French law with EU state aid rules- and, in the end, although the system was held to be in contravention of European rules, there was no requirement to return the aid.