Tax Authorities will evaluate and update dam matrices to collect IMI

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The Autoridade Tributária e Aduaneira (Tax and Customs Authority) will evaluate and update the matrices of the dams and move forward with the collection of IMI from this type of property, according to an order from the Secretary of State for Fiscal Affairs, Nuno Félix.

The law, to which Lusa had access, takes into account and follows the opinion of the Advisory Council of the Attorney General’s Office (PGR), unanimously approved in 2006, determining that “the assessment, registration and updating of the land registry of buildings relating to hydroelectric plants (…) be made based on the legal and property nature resulting from the understanding” contained in that opinion.

To move forward with this kind of general assessment of dams for IMI purposes, the Portuguese Environment Agency (APA) will have to provide the AT with information on “the constructions and buildings that constitute buildings,” based on the understanding in the OPG’s opinion.

The dispatch admits that if the services have doubts about the scope of the understanding contained in that opinion, these may result in a possible request for clarification from the OPG, but stresses that this cannot jeopardize the collection of IMI, and therefore the statute of limitations must be taken into account.

In other words, the clarification of any doubts will have to ensure that “the assessment of the corresponding taxes arising from the legal and property classification resulting from that opinion, as long as there is a risk of expiration or prescription of the corresponding tax credit.

This way, once the evaluation process is concluded and IMI assessments are made until December 31, 2023, it will be possible for the AT to claim IMI for the years 2019, 2020, 2021, and 2022.

This dispatch follows a request from two municipalities — Miranda do Douro and Mogadouro — regarding the IMI tax treatment of hydroelectric equipment (dams) and after the Portuguese Socialist Party (PS) announced a draft resolution recommending the Government to clarify the interpretation of the law on IMI collection for dams.

In late January, the parliamentary leader of the PS said that the Socialist bench wants to end the exemption of payment to municipalities by companies that own dams, in particular EDP.

Speaking to journalists, Eurico Brilhante Dias sustained that the exemption in the payment of IMI, namely applied to dams owned by EDP, “has no grounds”.

It should be noted that following the OPG’s opinion, the AT concluded that “the constructions and buildings corresponding to the dams and the facilities allocated to the power generation center meet the concept of building for IMI purposes” and should therefore “be evaluated and registered in the matrix.

However, due to the high level of litigation that this understanding generated, in 2016 and after consulting the APA, IMI was no longer charged since it is APA’s understanding that public utility dams are part of the state’s public domain and therefore not subject to the tax.

The tax aspect of dams has jumped onto the media’s agenda following the sale by EDP of six dams in Trás-os-Montes (Miranda do Douro, Picote, Bemposta, Baixo Sabor, Feiticeiro and Tua) for 2.2 billion euros to a consortium led by Engie.

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