WRITTEN QUESTION P-3185/02

by Alejo Vidal-Quadras Roca (PPE-DE) to the Commission

(31 October 2002)

Subject: Autonomous Community taxes on premises occupied by large commercial companies

In its pre-accession negotiations with the countries of Eastern Europe, the Commission is demanding that governments abolish or amend retail trade regulations which restrict freedom of competition or affect the principle of freedom of establishment.

Regulations of this type, however, are to be found in the national legislation of existing EU Member States, for example, Spain, and specifically the Catalan Autonomous Community, where an Autonomous Community law (Law 16/2000) has been adopted, providing for taxes on premises occupied by large commercial establishments; the revenue thus raised is to be channelled into aid to small traders operating in the Catalan Autonomous Community. This means that the aid received by small traders is to be funded by their competitors.

The adoption of this measure comes on top of Catalonia's existing measures restricting the opening of large commercial establishments, in the wake of Law 17/2000 on commercial facilities.

Is the Commission aware of the inconsistency of allowing legislation of this kind to survive within the EU and simultaneously demanding that the candidate countries abolish it?

What is the Commission's view of sectoral aids funded by the competitors of those benefiting from the aids, and does the Commission, in this connection, intend to bring any kind of proceedings against the public aids covered by Catalan Law 17/2000?

What measures does the Commission intend to adopt with regard to retail trade Regulations, such as those which exist in Catalonia, which prevent the freedom of establishment of Community companies?

Answer given by Mr Monti on behalf of the Commission

(17 December 2002)

A complaint was lodged with the Commission against Law 16/2000 of the Comunidad Autónoma Cataluña. The complainant alleged that this law introduced a levy on the premises occupied by large commercial establishments with the objective of financing traditional retail commerce located in urban centres. According to the complainant, this measure constitutes state aid within the meaning of Article 87(1) of the EC Treaty. The Commission requested further information on this issue from the Spanish authorities.

According to the information received, the resources raised by the new levy introduced by Law 16/2000 will be used mainly to finance infrastructure and will only secondarily be of direct benefit to local retail commerce.

In particular, as far as the investment in infrastructure is concerned, it is generally available to the public and does not benefit a given undertaking or sector. Regarding the direct aid to local retail commerce, the regional authorities have undertaken to respect the threshold for de minimis aid. Therefore, any aid granted would not fall under Article 87(1) of the EC Treaty.

For these reasons and on the basis of the information available to the Commission at this stage of the inquiry, such a parafiscal levy seems to fall outside the state aid rules of the EC Treaty.

As for the rules governing free movement within the internal market, the Commission has no intention whatsoever of authorising the retention of rules that would be deemed contrary to Article 43 of the EC Treaty relating to the freedom of establishment, whether implemented by Member States or candidate countries. It would remind the Honourable Member that, in its report on the state of the internal market for services(1), it noted that a number of measures currently exist in the Member States, notably with regard to large commercial establishments, without commenting on their compatibility with Article 43. It must now make a careful legal analysis of the various rules, in particular with regard to their discriminatory or non-proportionate nature, in order to propose, where necessary, the appropriate solutions.

With regard specifically to the parafiscal levy as such, irrespective of its use, it can be recalled that national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it(2). The first argument put forward by the Spanish authorities and relating to the grouping of existing businesses in urban centres which is basically an economic objective, raises doubts as to its acceptability on grounds of general interest. The second, argument, which related to the renovation of the areas surrounding the large commercial establishments in order to minimise their impact on the urban environment, could be admissible on the grounds of general interest. The method for calculating the levy takes into account, in addition to the surface area of the establishment, the existence or absence of public transport in order to determine the volume and foreseeable impact of road traffic. However, the lack of details in the information made available to the Commission on the reasons for setting different thresholds and on possible exemptions and interest-rate subsidies granted to certain types of business (DIY, gardening, furniture, etc.) makes it difficult for the Commission at this point to assess the proportionality of the measure in question.

(1) Report from the Commission to the Council and the European Parliament on the state of the internal market for services, 30 July 2002, COM(2002) 441 final.

(2) Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 37.