One of the dams sold by EDP to French consortium led by Engie. Image: Lusa

Communities fighting for taxes from EDP’s polemic dam sale hear time is running out

Unless tax authority carries out evaluation by December, monies could be lost

In a scenario that could never be conceivable in private tax affairs: TVI has warned that communities fighting for €1.5 million due to them in taxes from the polemic €2.2 billion sale of six hydroelectric dams in 2020 could be lost unless crucial government work is completed by the end of this year.

As so many of those local people in the Miranda do Douro area have remarked, if private taxpayers “forgot to pay, or contested IMI/ stamp duty, assets and salary would be seized within less than a month”.

But when it comes to big business, €1.5 million could simply be written off, says TVI.

The situation refers to money due from the sale of six hydroelectric dams by EDP to a consortium led by French energy company Engie three years ago.

This has always been seen as a situation in which authorities have appeared to be telling less than the full story. Local professionals banding together in a tenacious group going by the name of ‘the Cultural Movement of Terras de Miranda” believe the environment minister of the time “knew of the subterfuge of fiscal planning used by EDP to avoid the payment of taxes” and did nothing to stop it.

Thus they took up the challenge, fought long and hard – finally hearing last February, that ‘yes’, finally, the government had instructed the AT tax authority to ‘evaluate’ the tax due on the sale. The group had won significant ground.

Or had it? Six months on, TVI’s report suggests the time it is taking for the AT tax authority to do its job may mean the tax is irretrievably lost.

“The municipalities could lose the IMI revenue from the dams of the Douro if the evaluation is not done by the end of the year”, says the station.

And today, secretary of State for tax affairs Nuno Santos Félix has “warned of the complexity of the IMI tax process for these properties”.

He explains that “we must realise that, on the one hand, it’s a complex process and, on the other, dams of this size have not been assessed for several decades”, emphasising, says Lusa, that the evaluation and assessment of IMI on “these properties depends on a series of procedures that depend on third parties…”

Regarding the fulfilment of deadlines, Santos Félix warned that litigation is a “factor of uncertainty” (referring to EDP’s assertion that it will fight any order to pay these taxes) “this is the factor that AT does not control,” he said.

However, the secretary of State emphasised that “AT has been given very clear instructions to make efforts to ensure the assessment and liquidation of dams from 2019 onwards”.

The Terras de Miranda group is looking at a scenario where it could essentially have its cake, but never get to eat it.

Commentary on the group’s Facebook page vacillates between those who insist on ‘fighting to the end’ and those who appear to think this was ‘always the plan’: “You wouldn’t expect anything else”, says one ‘top fan’. “They privatised strategic sectors, they were and are conniving, they make laws in lawyers’ offices for the government and then they go and litigate against that same State. They go from Parliament, the government, the CCDRs (commissions for regional development), the CIMs (intermunicipal communities) and the public administrations to the lawyers’ offices and vice versa. It’s the revolving door system. Just look up the names, it’s all there! Those who allowed the dam deal to go through should already have been held accountable for their irresponsibility and incompetence”.

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