The Terra de Miranda Cultural Movement warned this Monday that the 335.2 million euros that EDP owes for the dam business, as well as the IMI, may never be paid, due to the Government’s lack of political will. It is yet another group to formally join the criticisms that had already been made last week by the region’s mayors, and which ended up being one of the main themes that dominated Friday’s parliamentary debate.
“The facts that reveal the lack of political will to force EDP to comply with its tax obligations are evident. On the same day that the Public Prosecutor’s Office (MP) gave express orders to the Tax Authority (AT) to settle and collect the taxes due, going so far as to quantify them, the Minister of Finance publicly admitted that AT disobeyed this order”, justified the Terra de Miranda Cultural Movement (MCTM), in a statement sent to Lusa.
According to this civic movement, the Minister of Finance, Miranda Sarmento, “forgot to say that EDP has the duty to pay and has not committed to ensuring that the tax administration, of which he is the highest responsible, will comply with the MP’s order”, stressed the MCTM. In this case, the gains in IRC, Stamp Duty and Municipal Tax on Transmissions (IMT) are at stake, which according to the Public Ministry affect the controversial sale of six dams in 2020. But these are not the only taxes generating controversy.
Furthermore, “the minister [das Finanças] announced that it would propose an amendment to the IMI Code which intends to establish that, only from now on, dams are subject to IMI and that they were not in 2020”, point out the members of the movement in the same note.
According to the MCTM, “if this proposal is approved, the 112 million euros of IMT and Stamp Tax debt, which the MP ordered to be liquidated, will fall to the ground because, according to the same order, if there is no liability to IMI, there will also be no IMT or Stamp Tax”.
The movement also appealed to parties with parliamentary seats to reject the Government’s proposal.
In the opinion of MCTM members, the MP’s order makes it very clear that dams, including all their equipment, have always been subject to IMI, highlighting that this legislative change only serves to benefit EDP.
Miranda Sarmento, Minister of Finance, between the Prime Minister and the Minister of the Presidency
TIAGO MIRANDA
The fourth order to the Tax Authority
In addition to the Minister of Finance, the movement also criticizes the Tax Authority, led by Helena Borges. Citizens are reminded that “this order from the Public Ministry is the fourth order that the General Director of AT has received to settle taxes to EDP”.
Helena Borges was forced, also by the previous Government, to change the criteria for reassessing the tax heritage value of dams. At the time, in a struggle, Secretary of State Nuno Félix was forced to issue three separate orders to enforce his determinations. “AT took two years to comply with the three orders. This delay, we now know, prevented the MP from concluding this process before the expiry of the legal period for the right to liquidation to expire”, points out the Movement.
Now, it is also the Public Prosecutor’s Office who orders the AT to do what should have been done a long time ago, considers the movement of citizens, who, like the region’s mayors, consider that a court order was not necessary for the Tax Authority to have fulfilled its administrative functions.
EDP argued that the dam sale structure was fiscally neutral
Photo DR
The MP dismissed suspicions of tax fraud in the sale of six EDP dams to Engie, but concluded that the State has to receive 335.2 million euros in “missing taxes”, including Stamp Duty, IMT and IRC, in addition to interest.
The investigation, conducted by the Central Department of Investigation and Criminal Action (DCIAP), ruled out criminal aspects in the operation, but determined that the Tax Authority must proceed with the collection of taxes “in default and that were not paid”.
On Wednesday, the mayors of the municipalities covered by the sale of the six Trás-os-Montes dams by EDP to Engie welcomed the decision.
The president of the Baixo Sabor Municipality Association, Eduardo Tavares, added that the next step is to request the Tax Authority “to collect these taxes within a year”.
The executive president of EDP stated that the company has not yet been notified of the MP’s decision on the sale of the dams to Engie, guaranteeing that the deal was “perfectly transparent” and “the same as many others”.
Following the MP’s decision, the Minister of Finance said it was “untimely” to count on the collection of taxes from the sale of the six EDP dams in the Douro “in the coming years”, remembering that “any taxpayer has the right to litigate”.
The sale of the dams – Miranda, Bemposta, Picote, Foz Tua, Baixo Sabor and Feiticeiro – was agreed at the end of 2019 and completed between December 2020 and January 2021, for 2.2 billion euros, through a spin-off and corporate merger between companies created by EDP and the purchasing consortium led by the French company Engie.
The fiscal aspect of dams began to be discussed 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, with the deal concluded at the end of 2020.
Since then, the Movimento Terras de Miranda and several deputies have considered that the deal should have resulted in the payment of around 400 million euros in taxes owed for the sale of the six Trás-os-Montes dams, of which 110 million euros are in stamp duty. Meanwhile, the movement and the region’s mayors began to diverge on the best strategy to guarantee the recovery of the various taxes.