Dutch Port Authorities Appeal EC Corporation Tax Ruling

The Port of Rotterdam Authority, together with the Amsterdam Port Authority, Groningen Seaports, the Moederdijk Port Authority, the Port of Den Helder and Zeeland Seaports, is going to appeal the European Commission’s decision mandating Dutch seaport operators to pay corporation tax beginning January 1, 2017.

“We are not against paying corporation tax, but then it should apply to all European seaports. This is a matter of principle for us. The foreign ports with which we have to compete do not pay corporation tax and, in addition, are even supported in various ways by their governments,” said Paul Smits, financial director of the Port of Rotterdam Authority. “Within Europe, it should be a question of ‘what’s sauce for the goose is sauce for the gander.’ The payment of corporation tax will come at the expense of our investments in the port complex. The purpose of this cannot be to increase unfair competition.”

Last year, the Dutch legislature made an exception in the law which exempting port authorities from paying corporation tax because they were not competing with private parties, but with foreign ports and with each other. According to Smits, this was done because port authorities in other countries – for example, Hamburg in Germany and Antwerp in Belgium – receive support from their governments through the coverage of losses or co-funding port infrastructure.

In January, the European Commission decided to overrule the special position of the seaports in Dutch legislation. In the legal proceedings, the port authorities will argue an infringement of the principles of proper administration, such as equality and proportionality.

The Port of Rotterdam, which is a major gateway for frozen food products into and out of Europe, would have to pay about 60 million euros in corporation tax per year on the basis of the most recent annual figures. This comes on top of the dividend that the Port Authority pays to the Municipality of Rotterdam and to the State. The dividend, which amounts to about 90 million euros and is indexed annually, is not dependent on profits made. In addition, the Port of Rotterdam Authority also contributes regularly to the costs of public, national infrastructure in Rotterdam.