Spanish yards may have to repay special tax credits
In August 1997, the European Commission allowed Spains publicly owned yards special tax credits for restructuring. Before August 1995 the yards had been part of the state owned INI group and could offset losses against the profits of other INI companies. But in August 1995, the yards were transferred to another stateholding company AIE. Since AIE was loss making, it couldnt offset the yards losses and the European Commission authorized the special tax credits as a form of state aid.
The European Commission ruled that this amounted to illegal state aid and that the yards must repay it, with interest. In the case just decided, Spain asked the European Court to annul this ruling. The Court must still rule on a countersuit brought by the Commission.