Press Release: State aid: Commission decides tax reductions on regional production in Sicily constitute illegal aid

The European Commission has decided that fiscal incentives adopted by Sicily in two regional laws are incompatible with EC Treaty state aid rules. The schemes provide for exemptions from the Italian tax on regional production activities (IRAP) in favour of companies operating in certain sectors in Sicily. These tax exemptions would be liable to distort competition with the EU's Single Market by selectively favouring certain categories of undertakings and therefore cannot be implemented. As no aid has yet been granted under these measures, there is no need for the Commission to ask for recovery.