Judgments nº T-168/99 of Court of First Instance of the European Communities, March 06, 2002

• Resolution Date: March 06, 2002
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-168/99

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition)

6 March 2002 (1) (State aid - Decision to initiate the procedure under Article 88(2) EC - Order to suspend payment of alleged aid)

In Case T-168/99,

Territorio Histórico de Álava - Diputación Foral de Álava, represented by A. Creus Carreras, lawyer,

applicant,

v

Commission of the European Communities, represented by F. Santaolalla, G. Rozet and G. Valero Jordana, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATION for the annulment of the Commission Decision of 31 March 1999 initiating proceedings under Article 88(2) EC in respect of the aid granted by the Spanish Authorities Ramondín SA and Ramondín Cápsulas SA and requiring the Spanish Authorities to suspend payment of that aid (OJ 1999 C 194, p. 18),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber, Extended Composition),

composed of: J. Azizi, President, K. Lenaerts, V. Tiili, R.M. Moura Ramos and M. Jaeger, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 26 June 2001,

gives the following

Judgment

Legal context

Maximum aid intensity allowed in the Basque Country

1.

According to the Spanish regional aid map proposed by the Commission (OJ 1996 C 25, p. 3), the maximum limit for aid in the Basque Country is 25% net grant equivalent (nge).

Tax concessions in force in the Territorio Histórico de Álava

2.

The tax arrangements in force in the Basque Country are governed by the Economic Agreement established by Spanish Law 12/1981 of 13 May 1981, as last amended by Law 38/1997 of 4 August 1997. Under the Economic Agreement, the Diputación Foral de Álava (Álava Provincial Council) may, under certain conditions, organise the tax system within its territory.

3.

On that basis, the Diputación Foral de Álava has established several tax aid measures, in particular a tax credit of 45% and a reduction of the basis of assessment to corporation tax.

Tax credit of 45%

4.

The Sixth Additional Provision of Norma Foral 22/1994 of 20 December 1994 (regional regulations) implementing the 1995 budget of the Territorio Histórico de Álava [Boletín Oficial del Territorio Histórico de Álava (hereinafter ‘BOTHA’) No 5, of 13 January 1995] reads as follows:

‘Investments in new fixed assets made between 1 January 1995 and 31 December 1995, which exceed ESP 2 500 million, in accordance with the Diputación Foral de Álava agreement, will receive a tax credit of 45% of the cost of investment determined by the Diputación Foral de Álava, to be applied to the definitive amount of tax payable.

Any tax credit not used up because it exceeds the amount of tax liability may be applied in the nine years following the year during which the Diputación Foral de Álava agreement was concluded.

The Diputación Foral de Álava agreement will lay down the time-limits, and any restrictions applicable in each case.

The advantages granted under this provision will be incompatible with any other fiscal advantage in respect of the same investment.

The Diputación Foral de Álava will also determine the length of the investment process, which may include investments made during the preparation of the project which is at the root of the investment.’

5.

The validity of that provision was extended, for the year 1996, by the Fifth Additional Provision of Norma Foral 33/1995 of 20 December 1995 (BOTHA No 4 of 10 January 1996), as amended by point 2.11 of the only derogating provision of Norma Foral 24/1996 of 5 July 1996 (BOTHA No 90 of 9 August 1996). For 1997, the fiscal measure was...