Limits imposed by EU law on tax benefits to business activity for depopulation reasons

Abstract

Depopulation generates inequalities among citizens, in terms of equal opportunities, as well as an increase in costs and accessibility to basic services. To fight depopulation, in some sectors a differentiated and more favorable tax system is proposed for economic activities carried out in depopulated areas. It should be noted, however, that these aids may violate freedom of enterprise and free competition. Thus, the possibility for the Spanish legislator (State and Autonomous Communities) to introduce a differentiated regime, lower taxation of economic activities in unpopulated areas, is conditioned by the state aid regulations of the European Union. The article analyzes the conditions imposed by EU law for the regulation of tax incentives in unpopulated areas.

Keywords:

depopulation, development, state aid, free competition, tax benefits, tax exemptions