Limerick plant wins legal battle in Europe
The European Court of Justice yesterday ruled the commission was wrong to try to end an exemption which Aughinish enjoyed from paying tax on oil used in the production of alumina.
The legal action was taken by Aughinish and two other alumina producers in France and Italy and supported by the Irish Government.
EU officials had sought to terminate the tax exemption in December 2005 on the premise that it effectively constituted State aid for Aughinish.
The Russian company, which is one of the biggest employers in the Shannon estuary region, warned that some jobs at the Askeaton plant would be under threat if it lost the case.
It employs 500 full-time staff and 200 contract workers, contributing around €100 million to the local economy each year.
Aughinish said the company would have faced serious and irreparable damage if it had been forced to repay over €8.1m in excise duties plus interest and legal costs.
However, the court noted officials in Brussels had acknowledged that none of the relevant tax exemptions gave rise to distortions in competition or interfered with the working of the EU’s internal market.
It also ruled that the exemptions had been successively authorised and extended over many years by decisions of the EU Council.
The court also found that the commission had failed to provide adequate reasons as required for issuing a controversial decision in December 2005 which sought to end the tax exemption enjoyed by Aughinish and other alumina producers.
The court ordered the commission to pay all legal costs in the case.
