Home News Charleroi airport hit by tax backlash

Charleroi airport hit by tax backlash

Published on 12/07/2004

12 July 2004

BRUSSELS – Charleroi airport will have to pay back over EUR 10 million in extra tax payment following the European Commission’s ruling against the allowance of state aid to low-cost airline Ryanair, according to press reports on Monday.

Since the Commission earlier this year charged the Irish low-cost carrier with benefiting from illegal state aid, the Belgian finance ministry has been scrutinising the ruling to determine the liability of the airport authorities (BSCA).

Its findings will prove costly for the airport, which has now been asked to repay EUR 3.351 million for 2002 and EUR 7.198 million for 2003.

According to Belgian tax officials, aid given to Ryanair by BSCA constituted “abnormal advantages or benefits,” and, under the Belgian tax code, should have been added as company benefits.

This is always the case, stipulates the code, when a company established in Belgium has direct or indirect interdependent links with another company with common interests.

The links established between the airport and Ryanair through marketing firm Promocy, were found by the Commission to be illegal.

In May, Promocy was subject to a tax audit by the airport authorities, who gave the firm the all-clear despite rumours of a judicial inquiry into possibly suspicious financial activities.

The airport now stands accused of failing to adequately complete the tax declaration, an offence that allows the tax authorities to increase the sums owed by 50 percent.

Charleroi airport has been given until the end of July to appeal against the decision.

The European Commission initially ruled in February that the budget carrier had benefited from illegal subsidies such as reduced airport charges and ground-handling fees.

Among the incentives awarded to Ryanair in 2001 were a 50 percent reduction on a two euro landing charge per passenger, an unprecedented four euro per passenger contribution towards promotional activities and a preferential one euro per passenger ground-handling rate.

[Copyright Expatica 2004]

Subject: Belgian news