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Editor in chief: Angelo Scorza
20/03/20 10:04

The Court of Cassation decreed that Italian Port Authorities fees are not subject to taxation

Fees are neither corporate incomes nor land incomes, rather “amounts paid to carry out activities falling within institutional purposes”

La sede della Corte di Cassazione fotografata da Sergio D’Affitto CC BY-SA 3.0

by Andrea Moizo

The double ruling of the Court of Cassation about the pending proceedings initiated by the European Commission against Italy concerning the supposed liability to ordinary taxation of the fees paid to Italian Port Authorities for the concessions granted to terminal operators confirmed the theories of the Ministry of Infrastructure and Transports.

The rulings in question concern a dispute initiated by the Italian Revenue Agency against the Port Authority of Taranto in order to subject to taxation the public body’s income resulting from the concession fees paid between 1997 and 2003. Such ruling confirmed the opinion of the Provincial Tax Commission and of the Regional Tax Commission.

In fact, the High Court rejected the censure of the Agency, according to which the “Regional Tax Commission erroneously ignored the fact that, for income taxes purposes, port state properties are recognized as properties related to the institutional activity of the Port Authority, and that the fees agreed upon for their concession are land incomes”.

Said assumption was rejected by the Court of Cassation “in light of the case-law of the supreme courts, according to which (based on several rulings issued between 2013 and 2015, ed.) ‘the fees paid to port Authorities for the concession of maritime state properties are not subject to VAT, nor to Corporate Income Tax (IRES), since said amounts are paid to carry out activities falling within the institutional purposes of such non-economic public bodies - i.e. to ensure port functions instead of the State – which are performed according to a regulating plan determined by a third party and by the granting of supervisory and sanctioning powers, until the withdrawal of the concession in case of incorrect pursuit of the objectives set or of breach of the obligations undertaken on the part of the concessionaire”.

Judges pointed out that “the activities object of this ruling carried out by the port Authority (such as, for instance, the concession of port quays, which is provided for by law) fall within state functions and they cannot be regarded as corporate activities since they must be subject and related to state interests and to the proper functioning of port areas, resulting in powers granted exclusively to that end, (see Law n. 84 of 1994 for the choice of concessionaires), with bound discretion, subject to checks by the Ministry of Transports”.