Viseu Court rules in favor of renewable energy company in case against the Tax Authorities

Daily

The company challenged the valuation of 5.5 million euros and took the case to the Administrative and Fiscal Court of Viseu. Judgment says that wind towers cannot pay IMI, contrary to what the Tax Authority argues

Photographer: Igor Ferreira

The Administrative and Fiscal Court (TAF) of Viseu ruled in favor of a renewable energy company that challenged the Tax Authority’s decision to charge IMI on 17 wind towers.

The court considered that the objection action imposed by the company was “completely valid”, thus contradicting the arguments of the Tax Authority which, for several years, has been trying to charge municipal property tax to renewable energy infrastructures such as wind farms, solar plants and hydroelectric plants.

This is the most recent case in a long dispute that pits the Tax Authorities against companies in the sector that, last year, took several challenges to the courts, understanding that wind towers are mere equipment and should be excluded from the IMI calculation.

The Viseu TAF ruling, cited by the newspaper Expresso and which does not reveal either the company or the municipality involved, even recalls that the charging of IMI to wind farms “has already generated significant and extensive litigation”.

In this process, the company in question contested the assessment of the park by the Tax Authorities, which set a taxable asset value of 5.5 million euros in 2023, a number that included the wind towers. He further argued that towers “cannot be included in assessments for IMI purposes” because “they constitute an integral part of equipment or machinery and not a building or construction”.

The same company is also of the opinion that a wind tower has essential equipment for the production of electrical energy, is “a perfectly removable structure” and is removed from the site at the end of the project’s life. Confronted with the assessment made by the Tax Authority, it decided to move forward with the process at the TAF in Viseu.

In response to the challenge, the Tax Authority defended itself using a 2021 circular, stating that when evaluating wind farms, “existing constructions are taken into account, namely substations, control buildings, solar panel support structures and the wind towers, as well as the land where these constructions are located”.

The Viseu TAF emphasizes that the IMI Code does not have specific rules on wind farms nor does it include taxation on equipment. The court goes further and says that, if this were to happen, it would lead to “truly ridiculous results” such as industrial machines being subject to tax. Therefore, the court concluded that the towers do not form part of the concept of building and “cannot be taxed” for IMI.

Speaking to Expresso, the president of the Renewable Energy Association, Pedro Amaral Jorge, believes that the Viseu TAF decision “will be the first of many similar decisions” in favor of companies in the sector.