State aid: Commission opens in-depth investigation into the Netherlands’ tax treatment of Inter IKEA
The European Commission has opened an in-depth investigation into the Netherlands’ tax treatment of Inter IKEA, one of the two groups operating the IKEA business. The Commission has concerns that two Dutch tax rulings may have allowed Inter IKEA to pay less tax and given them an unfair advantage over other companies, in breach of EU State aid rules. Commissioner Margrethe Vestager in charge of competition policy said: “All companies, big or small, multinational or not, should pay their fair share of tax. Member States cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere. We will now carefully investigate the Netherlands’ tax treatment of Inter IKEA.” In the early 1980s, the IKEA business model changed into a franchising model. Since then, it has been the Inter IKEA group that operates the franchise business of IKEA, using the “IKEA franchise concept”. What this means more concretely is that Inter IKEA does not own the IKEA shops. All IKEA shops worldwide pay a franchise fee of 3% of their turnover to Inter IKEA Systems, a subsidiary of Inter IKEA group in the Netherlands. In return, the IKEA shops are entitled to use inter alia the IKEA trademark, and receive know-how to operate and exploit the IKEA franchise concept. Thus, Inter IKEA Systems in the Netherlands records all revenue from IKEA franchise fees worldwide collected from the IKEA shops. The Commission’s investigation concerns the tax treatment of Inter IKEA Systems in the Netherlands since 2006. Our preliminary inquiries indicate that two tax rulings, granted by the Dutch tax authorities in 2006 and 2011, have significantly reduced Inter IKEA Systems’ taxable profits in the Netherlands. The Commission has concerns that the two tax rulings may have given Inter IKEA Systems an unfair advantage compared to other companies subject to the same national taxation rules in the Netherlands. This would breach EU State aid rules. The opening of an in-depth investigation gives the Netherlands and interested third parties an opportunity to submit comments. It does not prejudge the outcome of the investigation. The full press release is available online in here
Energy Union: EU solidarity in the integration of the Baltics into the European electricity grid
Today, 18 December 2017, the Vice-President responsible for the Energy Union Maroš Šefčovič and the Commissioner for Climate Action and Energy Miguel Arias Cañete met with the Ministers of Energy from Poland, Lithuania, Latvia and Estonia, to agree on the way forward and to find a solution on the best way to desynchronise the Baltic States’ electricity grid from the Russian grid and synchronise it with the continental Europe system. This is a priority for the Juncker Commission. Today’s ministerial meeting was part of the Commission’s efforts to provide political support to the Baltic States’ wishes to achieve independence in terms of electricity supply security and operation of their electricity grids. President Jean-Claude Juncker said: “Achieving the electricity synchronisation of the Baltics will be a symbol of true European solidarity. My Commission supports this process and is ready to facilitate discussions between all Member States concerned.I am strongly committed to the synchronisation project, which will help complete the EU-wide energy market and improve security of supply in the Baltic region. It is a cornerstone for the implementation of the Energy Union priority of my Commission.” For historical reasons, the Baltic States’ electricity grid operates in a synchronous mode with the Russian and Belarusian systems. The synchronisation with the European grid through Poland will bring closer a fully functioning and connected internal energy market and increase the European Union’s energy security. A joint STATEMENT by the Ministers and the Commission is online. See also the MEMO (Q&A). Find more information about the Baltic Energy Market Interconnection Plan (BEMIP) on the Commission’s website. All about the Energy Union online.
€27 million for social enterprises in Denmark via EU Programme for Employment and Social Innovation
TheEuropean Investment Fund (EIF) and Merkur Cooperative Bank (Merkur) have signed the first Social Entrepreneurship guarantee agreement in Denmark under the EU Programme for Employment and Social Innovation (EaSI). This new guarantee agreement allows Merkur to provide a total of €27 million to social entrepreneurs over the next 5 years. Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: “Thanks to €27 million in EU funding, Merkur will help 600 social entrepreneurs in Denmark to access financing. This will allow them to grow businesses in areas with a strong social impact such as educational institutions, social institutions for citizens with special needs and social enterprises. Through the programme for Employment and Social Innovation, the European Commission shows its commitment to foster sustainable employment for the most vulnerable people in the labour market.” The EU-backed programme will help Merkur to provide loans to social enterprises, targeting vulnerable groups. More information on this transaction can be found here.
Commission proposes €2.1 million from Globalisation Fund to help 900 former Ericsson workers in Sweden
Today, the European Commission proposed a €2.1 million contribution from the European Globalisation Adjustment Fund (EGF) to help 900 redundant Swedish Ericsson workers find new jobs. Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, commented: “The proposed support from the EU’s Globalisation Adjustment Fund would help these redundant workers to adapt their skills and facilitate their transition to new jobs or help them set up their own enterprises. EU solidarity is key in overcoming the challenge of many people with the same skills who are being made redundant at the same time, in the same geographical areas”. Sweden applied for support from the Globalisation Adjustment Fund following the dismissal of 2,388 workers at telecom company Ericsson. The measures co-financed by the Globalisation Adjustment Fund would help these 900 former Ericsson workers find new jobs, by providing them with in-depth assessment, motivational coaching and career planning along with job-search related help; vocational training; entrepreneurship support; and measures for 50+ or disadvantaged workers. The total estimated cost of the package is €3.5 million, of which the Globalisation Adjustment Fund would provide €2.1 million. The proposal now goes to the European Parliament and the EU’s Council of Ministers for approval.
Better cooperation needed to improve tax and VAT collection in the EU – Commission reports
The European Commission has today published a series of recommendations for Member States on how to better work together towards better direct tax and VAT collection for national budgets. In particular, the results show that investment in digital and IT systems, as well as investment in human resources, will be crucial if EU countries want to improve their public finances. Pierre Moscovici, Commissioner for Economic Affairs, Taxation and the Customs Union, said: “National tax administrations should invest in modern and efficient digital tools if they want to see an improvement in their tax revenues. I call on tax administrations to continue working together for more efficient tax collection and to better fight tax fraud and avoidance. The Commission stands ready to support EU countries in their continued efforts.” Today’s reports highlight the overall positive impact of the EU-wide cooperation between tax administrations on tax collection, but also show that Member States have to deploy more resources to improve tax collection – an issue which, for VAT alone, can lead to losses for national budgets of up to €150bn a year. The Commission has this year already put forward far-reaching reforms of the VAT system to create a definitive VAT system and to create a single European VAT area that is simpler and fraud-proof. Cooperation between countries to recover lost taxes should also be improved, the report says, and countries should make better use of new data that is being collected as part of the major reforms on information exchange – an accomplishment which should give the fight against tax avoidance a major boost in the EU. The Commission will now take these findings forward with Member States to see how they can be addressed.
17% increase in organ transplants thanks to EU Action Plan
A report published today shows a sharp increase in organ donation and transplantation in the EU during the course of the 2009-2015 Action Plan. The surge in donation rates led to 4 600 additional transplant operations, a 17% increase. Kidney transplants account for 60% of the increase, livers for 24% and hearts for 11%. Vytenis Andriukaitis, Commissioner for Health and Food Safety, said “The news that thousands more people in the EU have benefited from the life-saving and life-transforming gift of organ donation warms my heart. It means the world to them, their families and friends. Credit for this achievement goes primarily to donors themselves, but also to national health authorities and healthcare professionals. I am also pleased that the Commission was able to play a role, adding value with the EU Action Plan which set a common agenda with clear priority actions for increasing transplant rates in all EU countries.” Amongst other achievements, the Action Plan lead to the appointment of local coordinators for deceased donation and to registries being set up to monitor health of living donors. The Commission and national authorities continue to build on its momentum, through EU-funded actions, notably on awareness raising and improving transplant options for end-stage kidney failure. For more information see dedicated website and infographic.
Capital Markets Union: Commission consults on how to make it easier for SMEs to tap capital markets
The Commission is today launching a public consultation on how to make it easier for small and medium enterprises (SMEs) to access public markets. SME financing through public markets has not fully recovered since the financial crisis, although listing on stock exchanges can give a significant boost to this type of businesses. This includes the listing of shares and bonds on ‘SME Growth Markets’, which is a new category of trading venues dedicated to small issuers. Facilitating SMEs’ access to finance at each stage of their development is central to the Commission’s Capital Markets Union (CMU) project. Much has already been achieved, notably simplified prospectus rules, as well as requirements for SME growth markets that will enter into force now in January 2018 with the Markets in Financial Instruments Directive (MiFID). However, more still needs to be done: the number of SME initial public offerings (IPOs) today has halved compared to 2005-2007. The Commission is assessing whether targeted amendments to EU rules could deliver a more conducive regulatory environment to support SME listings. The consultation will help the Commission identify ways to cut red tape and build a supportive environment for SMEs wanting to list on public markets. At the same time, the rules will continue to safeguard investor protection and market integrity. The consultation questionnaire on ‘Building a proportionate regulatory environment to support SME listing’ is available here and will be open until 26 February 2018.
Fight against illicit drugs: Commission proposes to ban seven new substances
Today, the Commission is proposing to ban seven new psychoactive substances (NPS) across the European Union, in addition to nine others banned previously this year. These toxic substances can cause severe harm to health and can even lead to death, and pose a growing threat to public health in Europe. Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos said: “New psychoactive substances pose an increasingly serious threat to public health. In Europe, we work to make sure that we stay one step ahead of this fast-moving and dangerous business. More needs to be done to keep European citizens safe, especially the younger generations. We need to ensure not only that these new drugs cannot be bought, but also that they don’t appear on the market in the first place. I now call for the Council to take a swift decision in order to speedily remove those new drugs from the market.” Currently, these seven new psychoactive substances are not covered by international drugs controls and remain a serious challenge to European public health, especially for young people. According to the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), these toxic substances are associated with over 170 deaths across the EU and a number of acute intoxications. The Commission’s proposals will now be discussed in the Council, which, in consultation with the European Parliament, will decide whether to adopt the measures.A full press release is available online.
Antitrust: Commission publishes non-confidential version of decision to fine Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service
Today, the European Commission has published the non-confidential version of the decision adopted on 27 June 2017 to fine Google €2.42 billion for breaching EU antitrust rules. The decision found that Google abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service. The decision is available under the case number AT.39740 on the competition website.
State aid: Commission opens in-depth investigation into support for Romanian rail freight operator CFR Marfa
The European Commission has opened an in-depth investigation to assess whether debt write-offs by the Romanian state in favour of rail freight operator CFR Marfa, and the failure to collect debts from the company, have given the company an unfair advantage in breach of EU State aid rules. CFR Marfa is the incumbent fully state-owned rail freight transport services provider in Romania. The company has been in economic difficulties for a number of years. It has a high level of debt, mainly towards the national social security and tax administration agencies, as well as towards the Romanian rail infrastructure manager CFR Infrastructure, which is also fully state-owned. Unlike passenger rail transport, the freight rail transport market in Romania is highly competitive, with numerous private operators, some having gained considerable market share following liberalisation of the market in 2007. In March 2017, the Association of Romanian Private Rail Freight Operators filed a formal complaint with the Commission alleging that CFR Marfa had received State aid in breach of EU rules. The Commission’s investigation will be looking at: i) a number of state support measures in favour of CFR Marfa concerning a debt-to-equity swap amounting to RON 1,669 million (around €360 million) in 2013; ii) the failure to collect, since at least 2010, of social security debts and outstanding taxes of CFR Marfa, and of debts towards CFR Infrastructure. A state intervention in a company can be considered free of State aid within the meaning of EU rules when it’s carried out at conditions that a private investor would have accepted. The Commission will now assess whether this was the case for CFR Marfa’s public creditors or whether, on the contrary, the state intervention has given CFR Marfa a selective economic advantage over its competitors and constitutes State aid. Commissioner Margrethe Vestager, in charge of competition policy, said: “The rail freight market is an essential component of any economy’s transport links. CFR Marfa is the incumbent in this market in Romania and has benefitted from the cancellation of public debts and the failure of public creditors to collect debts owed by it. We need to check whether a private investor would have acted in the same way as the public authorities did here and, if not, to assess whether these measures are compatible with EU State aid rules.” A full press release is available in here
State aid: Commission approves modified Italian tax incentives for the production of audiovisual works
The European Commission has approved, under EU State aid rules, two Italian tax incentives for the production of cinematographic and non-cinematographic audiovisual works. The budget for each scheme is decided annually and will range from €50 million to €150 million per year, until the end of 2023. The measures replace and modify similar Italian measures previously approved by the Commission (SA.48021 and SA.39375). For cinematographic works, a single tax credit rate of 30% will be applied to the eligible costs of independent film producers. For non-cinematographic works, a system with several tax credit rates (between 15% and 30%) is introduced for independent producers. The schemes also include an annual tax credit cap per company, which has been increased compared to the existing Italian support measures. The Commission assessed the schemes under its 2013 Cinema Communication and concluded that the measures contribute to the promotion of culture without unduly distorting competition in the Single Market. More information will be available on the Commission’s competition website, in the public case register under the case numbers SA.49294 and SA.49296.
State Aid: Commission approves €3.8 million investment aid to Debrecen Airport in Hungary
The European Commission has found that Hungarian plans to grant around €3.8 million in investment aid to modernise the infrastructure of Debrecen International Airport are in line with EU State aid rules. The modernisation of the airport consists of security and safety updates that will enable aircrafts to land in low visibility, an upgrade to the security fence, and an interconnector bridge between terminals. The project will facilitate regional development and contribute to improving connections in the region, without unduly distorting competition in the Single Market. The Commission therefore concluded that the project complies with EU State aid rules, in particular the criteria under the 2014 Aviation Guidelines for investment aid to airports. More information will be available on the Commission’s competition website, in the public case register under the case number SA.46378 once confidentiality issues have been resolved.
State aid: Commission approves prolongation of support for biofuels in Lithuania
The European Commission has approved, under EU State aid rules, a Lithuanian scheme supporting certain biofuels. The scheme provides for aid in the form of direct grants for producers of bioethanol from cereals and of biodiesel from rapeseed. The scheme has a total budget of €54 million. It was originally approved for the period 2009-2017 (N.372/2007 and SA.35051), and has now been prolonged until 31 December 2020. The Commission found that the measure will help Lithuania reach its 2020 targets for renewable energy in transport, while limiting potential distortions of competition. In particular, the Commission verified that the aid is limited to sustainable biofuels, provides an incentive to use more environmentally friendly fuel and is limited to the minimum necessary to compensate for the additional costs of biofuels. More information on today’s decision will be available on the Commission’s competitionwebsite, in the public case register under the case numbers SA.48184.
Mergers: Commission clears the creation of a joint venture by Perform and WME IMG
The European Commission has approved, under the EU Merger Regulation, the creation of the joint venture PIMGSA by Perform Group Limited (“Perform”), both of the UK, and WME Entertainment Parent, LLC (“WME IMG”) of the US. PIMGSA will be active in the commercialisation of South American football sports rights. Perform, which belongs to Access Industries Inc. group of the US, is a holding company with subsidiaries that hold interests principally in digital sports content and media. WME IMG, controlled by Silver Lake Group LLC of the US, is active globally in the sports, entertainment, media and fashion industries. The Commission concluded that the proposed acquisition would raise no competition concerns because PIMGSA has negligible actual and foreseen activities within the EEA. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8664.
Mergers: Commission clears acquisition of sole control of CeramTec by BC Partners
The European Commission has approved, under the EU Merger Regulation, the acquisition of sole control over CeramTec Holding GmbH of Germany by BC Partners Holdings Limited of the UK, through the fund BC European Capital X. CeramTec Holding is the parent company of the CeramTec group of companies active in the production of high-performance advanced ceramic materials and products. BC Partners is a private equity firm. The Commission concluded that the proposed transaction would raise no competition concerns given the absence of any horizontal or vertical overlaps. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8705.
Commission launches public consultation on actions to reduce littering from single-use plastic items and fishing gear
The Commission has launched a public consultation to gather views on possible actions to reducing litter from single-use plastic items and fishing gear. Single-use plastics are items that are usually thrown away after one brief use. These items are rarely recycled and often end up as litter in the environment. Plastics make up 85% of beach litter; single use items represent 61% and fishing related items 20% of such plastic items. This is issue of acute public concern: 87% of Europeans are worried about the impact of plastics on their health (Eurobarometer, 2017). The Commission’s Action Plan for a Circular Economy identified plastics as one of its 5 priority areas and a policy document outlining the EU’s strategy for plastics is under preparation for adoption in the new year. Today’s public consultation builds on the existing dialogue with stakeholders (i.e. with the plastics industry, researchers, nongovernmental organisations and citizens) and guide future actions. The consultation will remain open until 12 February 2018. More information here.
Europe – the continent of solidarity: Joint Statement on the occasion of International Migrants Day
On International Migrants Day, First Vice-President Timmermans, High Representative/Vice-President Mogherini, Commissioners Hahn, Mimica, Avramopoulos, Stylianides, and Jourová, said: “On International Migrants Day, we remember all those who live outside their county of birth and are on the move – either by choice or forcibly. We remember that our own continent, Europe, is built on migration. […] Today, our European Union allows people across the continent to freely travel, to study and work in other countries. This has made Europe one of the richest places in the world – in terms of culture, of economy, of opportunities and in terms of liberties. But this day is also an occasion to remember those who have left their homes, in the face of conflict, political oppression, poverty or lack of hope, and who struggle to build a new and decent life elsewhere. […] Protecting and upholding the fundamental rights and freedoms of all migrants, regardless of their status, has always been and will always be our priority. This is at the heart of our European Agenda on Migration. We are working relentlessly, inside and outside the European Union, in close cooperation with our Member States and our international partners to save lives, provide protection, offer safe and legal pathways for migration and tackle the root causes that force people to leave their homes in first place, as well as fight the criminal networks that often take advantage of people’s despair. We have a shared responsibility towards people on the move and we need to act on a global scale to support them and to uphold the safety, dignity and human rights of migrants and refugees. […] Europe is committed to remaining the continent of solidarity, tolerance and openness, embracing its share of global responsibility. And for those who we have recently welcomed to Europe, we want the same as we want for all Europeans, namely to prosper and flourish and contribute to a better future for our continent. […]”. See the full statement and background material here.
High Representative/Vice-President Federica Mogherini travels to Lebanon on 19 December
The High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission Federica Mogherini will travel to Beirut on 19 December. She will reiterate the EU’s continued strong support for Lebanon, its longstanding partner, following the latest developments in the country. She will meet with President Michel Aoun, Prime Minister Saad Hariri, Foreign Affairs Minister Gebran Bassil and the Speaker of Parliament Nabih Berri. The meetings will provide an opportunity for the EU and Lebanon to exchange views on how to work closer together in preserving the stability, security and unity of the country as it heads towards elections in 2018. The preparations for the Brussels II Conference on Supporting the future of Syria and the region in Spring 2018 will also be part of the discussions, as well as the regional situation. Audio-visual coverage will be available on EbS.
Commissioner Stylianides in Germany
Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides is travelling to the German cities Hamburg, Hannover and Bremen this week to meet with official representatives of the respective three German Länder on Monday and Tuesday. The Commissioner will present the Commission’s plans on strengthening EU disaster management through its new rescEU proposal. A strengthened EU Civil Protection Mechanism will enable the EU to better respond in disaster situations and to help citizens when Member States national capacities are overwhelmed. The Commissioner willaddress the Parliament of Bremen and will also visit the Bernhard-Nocht-Institute for Tropical Medicine in Hamburgwhich contributed a mobile laboratory to missions coordinated by the European Medical Corps