The Commission considers that public companies that carry out economic activities in competition with private companies should likewise be subject to corporate tax – just as private companies are. Exempting certain companies merely because they are publicly owned gives them a competitive advantage which cannot be justified under EU state aid rules.
There are different ways to remedy this:
• Abolishing the corporate tax exemption for economic activities by all public bodies, both as part of the public administration or in the form of publicly owned companies, so that public and private economic activities are taxed in the same way. This would best address the issue.
• Alternatively, abolishing the corporate tax exemption only for publicly owned companies provided that all economic activities currently carried out by the public administration are hived off into (publicly owned) companies subject to corporate tax.
The Netherlands now have to inform the Commission within one month whether it can agree to the proposed amendments.
European Commission, IP/13/395