17.9.2008   

EN

Official Journal of the European Union

L 248/19

(1)

By letter dated 15 December 2006, registered by the Commission on 18 December 2006 (A/40324), the Slovak authorities, in accordance with Article 88(3) of the EC Treaty, notified their intention to grant regional individual investment aid in the form of a tax concession for investment activities by Alas Slovakia, s.r.o. at nine different locations (2).

(2)

Requests for information were sent out on 13 February 2007 (D/50598), 8 May 2007 (D/51936), 25 July 2007 (D/53139) and 12 October 2007 (D/54058) respectively. The Slovak authorities transmitted additional information by letters dated 12 March 2007 (A/32162), 4 June 2007 (A/34580), 13 August 2007 (A/36769) and 31 October 2007 (A/39017).

(3)

By letter dated 11 December 2007 (hereafter ‘the opening decision’) the Commission informed Slovakia that it had decided to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the measure.

(4)

The Commission Decision to initiate the procedure was published in the Official Journal of the European Union  (3). The Commission called on interested parties to submit their comments.

(5)

The Commission did not receive any comments from interested parties or from the Slovak Republic.

(6)

The aim of the aid measure is to promote the regional development of the regions of Nitra (4), Trnava (5) and Trenčín (6), all situated in Western Slovakia, which was at the time of notification an assisted area pursuant to Article 87(3)(a) of the EC Treaty; the aid intensity ceiling according to the Slovak regional aid map 2004-2006 (7) is 50 % NGE.

(7)

The proposed project constitutes an individual aid measure notified by the Slovak authorities, i.e. it is not granted under an existing aid scheme within the meaning of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (8).

(8)

The notified measure is to be provided in the form of a tax concession applied on an annual basis between 2007 and 2011. The annual concession is limited to 50 % of the corporate tax liability of Alas Slovakia, s.r.o. The total amount of the tax concession is limited to SKK 100 813 444 at current value (9) (approximately EUR 2,89 million). The aid cannot be utilised concurrently with aid from other sources to cover the same eligible costs.

(9)

The notified aid follows earlier aid in the form of a tax concession (based on Section 35a of the Income Tax Act) which was approved by the Slovak Office for State Aid before the accession of the Slovak Republic to the EU (10).

(10)

According to Section 35a of the Income Tax Act, an aid beneficiary is granted a corporate tax credit of 100 % over a period of five consecutive years and afterwards, it has the possibility to apply for a further tax credit of 50 % during the subsequent five years. The submitted notification concerns this second period of five years. The notified aid concerns other eligible expenditure and partially also other establishments than those covered by the pre-accession aid.

(11)

The national legal basis for the aid is Act No 231/1999 Coll. on State aid, as amended, Act No 595/2003 Coll. on income tax, as amended, and Act No 366/1999 Coll. on income taxes, as amended, as in force on 31 December 2003, in particular Section 52(3) of Act No 595/2003 Coll. on income tax, as amended, under the conditions specified in Section 35a of Act No 366/1999 Coll. on income taxes, as amended, as in force on 31 December 2003 (11).

(12)

The aid beneficiary, Alas Slovakia, s.r.o., is a large enterprise. It took over the activities carried out by the former state enterprises ‘Západoslovenské kameňolomy a štrkopiesky’ and ‘Strmáč Comp.Ltd’. The beneficiary is active in the extraction and processing of non-reserved minerals (gravel, stone) that fall under Division 08, Group 08.1, Classes 08.11 and 08.12 of the NACE statistical classification of economic activities. It is also involved in the production and sale of cement and concrete mixes — Division 23, Group 23.6 of the NACE classification.

(13)

According to the information provided on the website of the company, Alas Slovakia, s.r.o. ranks among the leading stoneware producers in the Slovak Republic. Its market share in Slovakia is around 15 %.

(14)

The major shareholder (67,45 %) of Alas Slovakia, s.r.o. is Alas International Baustoffproduktions AG (hereafter ‘Alas International’) based in Ohlsdorf (Austria), which in turn belongs to the ASAMER holding group. Alas International was founded in 1998 as a holding company to carry out international activities in the field of aggregates and concrete.

(15)

According to Slovakia, the aid concerns both the setting-up of three new establishments (Červeník, Okoč and Prievidza) and the modernisation, rationalisation and diversification of six existing production facilities (Veľký Grob, Veľký Cetín, Komjatice, Kamenec pod Vtáčnikom, Hontianske Trsťany — Hrondín and Nitra). The investment project will involve purchasing modern and environmentally friendly technical equipment from third parties and constructing and improving various sites for the extraction of raw materials (stone and gravel, aggregates). It would appear that all these establishments are completely independent from one another since there is no functional connection or any economic link between them.

(16)

Through these investment activities the company wishes to improve the quality of its products and services and guarantee the reliability of the supply of the required quantities and varieties for construction investors. The eligible costs of the project are estimated at SKK 345 026 285 (approximately EUR 9,90 million) at current value.

(17)

The works on the investment projects were notified to start in 2007. The project implementation should be completed by 2011. Details are given in the table below.

(18)

In its decision to initiate the formal investigation procedure in the present case the Commission, noted that it had doubts on the compatibility of the aid with the common market based on Article 87(3)(a) of the EC Treaty and on the Guidelines on National Regional Aid (12) (hereinafter referred to as RAG 1998) for the following reasons.

(19)

No comments were received from the Slovak authorities or from third parties to dispel the doubts raised when the formal investigation was initiated.

(20)

By notifying the aid measure with a standstill clause until authorised by the Commission, the Slovak authorities have complied with the procedural requirements of Article 88(3) of the EC Treaty.

(21)

The Commission considers that the measure constitutes State aid within the meaning of Article 87(1) of the EC Treaty for the following reasons, already indicated in the opening decision.

(22)

State resources are involved since an exemption from the payment of corporate income tax is provided for.

(23)

The measure relieves Alas Slovakia, s.r.o. of costs it would have to bear under normal market conditions. It will therefore provide an advantage to Alas Slovakia, s.r.o. over other companies.

(24)

The measure is selective since it addresses only one undertaking.

(25)

Finally, the production covered by the project is subject to trade. Therefore, trade between Member States is affected. In addition, the advantage granted to Alas Slovakia, s.r.o. and its production distorts competition or is liable to distort competition.

(26)

In so far as the measure constitutes State aid within the meaning of Article 87(1) of the EC Treaty, its compatibility must be assessed in the light of the exceptions provided for in Article 87(2) and (3) of the EC Treaty. The exceptions provided for in Article 87(2) of the EC Treaty, which concern aid of a social character granted to individual consumers, aid to make good the damage caused by natural disasters or exceptional occurrences and aid granted to certain areas of the Federal Republic of Germany, do not apply in this case. The measure cannot be considered to be an important project of common European interest or aid to remedy a serious disturbance in the Slovak economy, as provided for by Article 87(3)(b) of the EC Treaty. The measure does not qualify either for the exception allowed by Article 87(3)(c) of the EC Treaty that provides for the authorisation of aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent that is contrary to the common interest. In the same way, it does not have as its objective the promotion of culture and heritage conservation as provided for by Article 87(3)(d) of the EC Treaty.

(27)

Article 87(3)(a) of the EC Treaty provides for the authorisation of aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment. The regions of Nitra, Trnava and Trenčín (Western Slovakia) are eligible under this derogation.

(28)

In its decision to open the formal investigation procedure, the Commission explained the reasons, summarised in Section III of this Decision, for which it doubted that the measure under scrutiny could qualify for the derogation under Article 87(3)(a) of the EC Treaty. In the absence of any comments from the Slovak Republic or third parties, the Commission can deem these doubts to be confirmed.

(29)

The Commission finds that the measure notified by the Slovak Republic, as set out in paragraphs 6 to 10 above, is not compatible with the common market under any derogation laid down in the EC Treaty, and must be prohibited. According to the Slovak authorities, the aid has not yet been granted and, therefore, there is no need for its recovery,