The two recent rulings by the Supreme Administrative Court (STA), which mandate that wind farms must pay property tax (IMI) on all equipment essential for energy production, have been met “with some surprise” by the management of APREN – the Portuguese Renewable Energy Association.
“Like any other company, renewable firms pay VAT and corporate tax, contribute to the Extraordinary Electric Sector Contribution (CESE), support competitive balance mechanisms (‘clawback’), and also sustain the social electricity tariff. In addition to this tax burden, they already pay property tax,” stated the representative in comments to the Lusa agency.
The APREN president argued that the court’s decisions are “counterproductive” to the European Commission’s guidelines on energy transition and sovereignty, emphasizing that “they do not contribute to reducing energy costs, strengthening corporate competitiveness, or attracting investment to Portugal.”
“We are undermining the country’s energy potential with a fiscal logic,” he said.
He further explained that renewables “already pay property tax” on land and buildings, but when the STA determines that renewable plant equipment is part of industrial buildings and should be included in tax assessment, it’s as if they have started taxing “the computers within an office building.”
“With this fiscal logic of taxing renewables that lower energy costs, create environmental benefits, and ensure energy sovereignty, we risk halting investment in Portugal and pushing it towards Spain,” he added, noting that domestic producers compete with Spanish companies in the Iberian electricity market (Mibel).
The STA’s decision, released on Monday, overturns rulings by the Viseu Administrative and Tax Court and the Northern Central Administrative Court, which had previously decided that wind turbine towers should not be included in property tax assessments for wind farms.
Both the lower courts had concluded in the cases appealed by the Tax Authority that the wind turbine towers are “equipment assets” for electricity production and therefore do not constitute part of an industrial building, making their inclusion by the tax office in setting the Property Tax Value (VPT) for wind farms illegal.
The property tax (IMI) on renewable energy production center equipment—including wind farms, hydroelectric dams, and photovoltaic plants—has long been contentious, with developers legally contesting the Tax Authority’s assessments.
These STA rulings come after a Public Prosecutor’s decision concerning EDP’s dams on the Douro River, mandating that they must pay property tax (IMI) as well as property transfer tax (IMT) and stamp duty when transactions occur.
The Terras de Miranda Movement, advocating for tax collection on renewable energy production centers, stated in a communiqué that the STA rulings and the Public Prosecutor’s decision “obliging the Tax Authority to collect 335 million euros in taxes from dam sales enshrine what this Movement has always maintained: all taxes (IMI, IMT, Stamp Duty, and Corporate Tax) are due.”
During a parliamentary hearing on the draft State Budget for 2026 (OE2026), the Minister of State and Finance, Joaquim Miranda Sarmento, confirmed that the government will soon propose a law regarding the property tax collection rules for renewables.
