The government announced last week that it would require tax authorities to charge IMI on drafts after the Finance Department changed its position on the charge in 2016, allegedly following a dissenting ruling by the Center for Administrative Arbitration (CAAD). However, it was not the decision of the CAAD, but an opinion of the Portuguese Environmental Agency (APA) that led to the change of the Finance Department’s view on the EDP case. The APA defended that dams are public property, leading the IRS to assume that these properties would not be subject to tax. And that same APA opinion — and understanding of finance — was at the root of the arbitration decision, Nuno Villa-Lobos, president of CAAD, clarifies. He emphasizes that the process was the opposite of what is said: the IRS believed that the APA should say what it understood and the latter understood that no fees should be charged.
CAAD was given the decision to refuse to charge IMI to dams. Or rather, it was your decision regarding the Pracana dam that paved the way for the decision of the Tax and Customs Administration not to charge IMI for all dams. To confirm?
If we believe what two recent legislative initiatives say, one of them from the Bloco de Esquerda, then the conclusion is indeed that. It all started and ended at CAAD. But the facts… these facts… are totally wrong and have led many people astray. Journalists, commentators, etc. It seems that there was suddenly a huge rush to attribute to us the paternity of a decision with national impact and with a strong political interpretation. Unfortunately for these people, the story is very different. Yes, there is a CAAD decision, but this decision stems from a position taken by the Tax Office (AT) and the Portuguese Environmental Agency (APA).
Can it be clearer?
This is a bit long. But let me summarize the beginning of this matter as follows. I have a recording of the time here. On December 1, 2015, the unit of the Tax Administration responsible for the management of the IMI prepared information, with a consent decision from the Director General of the AT, acknowledging that the structures and buildings related to the dams that owned by the concessionaire companies were considered buildings for tax purposes and must be evaluated and registered in the matrix. As a result of this understanding, i.e. the obligation of matrix registration and submission to IMI of public utility dams, the concessionaires systematically challenged the additional assessments of IMI in the state tax courts. In the case of the CAAD, only one case was filed, for an amount of 54,387.87 euros, with the arbitral tribunal being constituted on June 3, 2016.
That is, at that time AT considered that IMI should be charged…
Yes. But the process continues. On May 5, 2016, i.e. about a month before – mind you, before – the establishment of the tax arbitral tribunal, the Tax and Customs Administration itself made several objections to the information it prepared in 2015. time, when it was not for the IRS, but for the APA to clarify the ownership status of public utility dams on a case-by-case basis. Well, right after that, the AT generically questions the APA about the dams that were in the public domain on June 16, 2016, to make a decision.
And what was the APA’s overall decision?
In short, the advice of the Portuguese Environment Agency ensured that all additional IMI assessments under discussion in the state tax courts were quashed by the services, ending the legal proceedings. After all, there was no point in taxing IMI.
And what happened to the process in CAAD?
Of all the requests to contest the additional IMI of the contested dams, ours was the only one to reach the end with a decision. Why? Since our decisions take about five months, we are quick. State courts take much longer. However, I emphasize that our decision was based precisely on AT’s new conclusions, which refer jurisdiction to the APA. And that this information was sent to us by the Tax and Customs Administration itself so that we could base the decision on the new reading. That is, it was not the arbitration decision that changed the IRS’ view of these matters, it was quite the opposite.
But there is a CAAD decision after all…
Yes, there is, but the change in meaning of the AT’s decision justifies the CAAD’s decision. Please note, all litigation processes in the state courts have been terminated by a decision of the AT. In our case, the dispute was not extinguished, but the result was the same: IMI was not sued for that dam, nor for any of the others.
In an interview with Business magazine, Joaquim Silvério Dias Mateus, known as the “father” of the IMI, says that for taxing dams it is necessary to legally expand the construction concept and that the SEAF order is not enough. Do you agree?
I will not comment.
But what does Silvério Dias Mateus say now, does he not follow the current insights of the Tax Authorities and of CAAD itself, because he asks the question at the level of the incidence of IMI and the concept of building?
CAAD has no understanding or position. An arbitral tribunal has ruled on a specific dam, which only applies to that case and not to any other. This decision has been published since December 2016 and can of course be the subject of agreement, disagreement or criticism. I have never commented, nor will I comment on any specific decision.
Source: DN
