An undertaking is subsidised by the authorities because it uses renewable energy. A municipality sells a plot of land (below the market price) to a housing corporation. A sector is exempted from tax. These are all examples of situations in which state aid plays a part. State aid is not illegal in itself, but must be assessed on the basis of European regulations.
What is state aid?
State aid involves government all measures that
financially benefit one or more undertakings or a specific sector.
They include measures of both the national government and local
authorities (such as municipalities or district water boards).
State aid may consist of direct government subsidies or indirect
measures, such as the sale of land or buildings or the granting of
loans on especially favourable terms, or the exemption from certain
taxes.
How is state aid relevant to you?
State aid is a purely European affair. In other words,
only European regulations need to be taken into account. Under the
Treaty of the Functioning of the European Union, state aid is
prohibited unless the measure has been notified and approved by the
European Commission or an exemption applies. Before state aid is
granted, it is important to establish whether it must be notified
to the European Commission, since an undertaking will have to repay
any illegal aid (plus interest).
For whom?
State aid regulations are not only relevant to the national
government and local authorities. Particularly in the annual
regularity audit it is important that the public authorities can
account for the expenses to consumers. Unlawful expenses may lead
to an unqualified audit report being withheld. Real estate
developers, housing corporations and other undertakings that
receive subsidies must also take European regulations into account,
since they are the parties that will have to pay in the event of
illegal aid.
What can we offer you?
Our European and Competition Law practice group can offer you
customised advice from various experienced specialists in the field
of state aid. We can:
