New round in favor of the Municipalities in the battle with licensees of Terminals for the application of IMU (ICI) on commercial "docks and squares"
Studio TCL Tax Consulting Legal comments on the recent decision by the Supreme Court - Sixth Civil Division no. 20259 of August 8, 2017 filed on 22/08/2017
The thorny issue regarding levying the ICI/IMU on State-owned open areas licensed to carrying out boarding/discharging of goods has come to the fore again in the last days of this "hot" summer. After witnessing the piling up of decisions made by a great majority of the tax courts, according to which the ICI / IMU was due only on "state-owned covered areas", an unexpected decision reached by judges at Supreme Court comes in and completely distorts the past caseload made by merit judges by stating the following assumptions: licensees of public areas have the right to use such stately property on exclusive basis; they do not provide public services; and the activity of managing and carrying out goods for profit does not equal to the performance of a public service. Based on those assumptions the Supreme Court concludes that ICI/IMU is due on licensees of State-owned open areas utilized for loading/unloading of goods. This subject matter has been extensively debated among operators, trade associations, tax consultants, municipalities and with particular reference with local administration in Genoa, which has long promoted the connected litigation.
To better understand the terms of the above issue, we summarize below the facts behind the afore mentioned decision, which have characterized the long-standing “legal battle” by terminals licensees operating in any part of Italy, in order to oppose the application of ICI / IMU on property part of the marine public estate. At the core of this dispute it is whether or not the ICI / IMU applies on "open" port areas, used for loading/unloading of goods; the answer to that question seems "apparently" simple: if the areas in question are stacked with category "E" and more precisely E/1, namely "stations for transport services, land, sea and air" (according to the definition referred to in r.d.l. no. 652 of 1939), there is no taxing event, therefore no payment of ICI/IMU is due on the said areas.
However, the apparent simplicity of the matter has quickly disappeared as a result of the subsequent regulations by administrative offices, that over the time have progressively altered the description of the cadastral category E. In particular, Law no. 286 of 24/11/2006 on cadastral classification has determined that "real units classified as cadastral categories E / 1-E / 2-E / 3-E / 4-E / 5-E / 6 and E / 9 cannot include buildings or portions of real estate for commercial, industrial, private use or other uses, when they are functional independent and able to generate income, that is to say when they per se may be utilized or are able to generate income, even if employed for institutional purposes.
As a result of this regulatory change, the Territory Agency has entered into a still in force regulation, according to which the allocation of the E / 1 group during the stacking of the areas pertains solely to instrumental property to perform an activity qualified as “public service”. The immediate consequence was the applicability of ICI/IMU for freight terminals and exemption from taxation for passengers terminals, causing a clear and groundless disparity in treating licensees both engaged in private and profit-oriented activities.
Faced with this situation, in many occasions both the Revenue Authority and the Ministry of Transport took a stand in favor of licensees, saying that "the areas of maritime estate shall be stacked in category E, provided that they are closely involved in carrying out operations necessary for port activities and maritime traffic". However, no change of route was made by the Municipalities and the Territorial Agency, which continued with the hard line, resulting in numerous legal battles by licensees of freight terminals who felt they had been penalized.
We have thus come to understand the reasons for the flourishing of such a vast caseload on this subject, but let us go further to take into consideration the particular case of the Port of Genoa.
According to the consolidated number of decisions made by judges of “the Superb city”, ICI/IMU is only due on "covered areas", that are those standing on buildings. At the base of these decisions, which at first glance seem disconnected from the "national" criterion of belonging to the E-cadastral category, there is a underlying reason, characterizing the entire Genovese port area, namely the need for the Genovese tax Courts to “judge equitably” in relation to the peculiar (and perhaps unique in Italy) situation, that has arisen as a consequence of the agreement signed in 2002 between the Port Authority and the Municipality of Genova to allow the application of ICI in wait of cadastral classification of port areas (in some areas still underway).
The terms of the agreement provided for the payment made by licensees of terminals, as sum to be paid "in advance" pending the registration of port areas. This sum was determined on the basis of expert assessment, carried out by the Territorial Agency and referring to a value per square meter of the port area, which varied depending on whether the same area was "covered" or "open". This resulting value was the tax base on which taxes applied. Unfortunately, this agreement completely ignored an analysis of the existence of the assumptions in order to stack Genoa port areas in Group E (stations for transport, land, sea and air): all with good peace of the Genoese licensees of terminals, who were bound by such agreement and unable to react (some of them have even seen the cadastral classification of areas assigned to them as industrial sites...).
This explains the reasons why litigation under "the Lantern" does not depend on cadastral classification and is based on the identification of the areas as either "covered" or "discovered" for the purpose of tax deferral.
In the light of all the above, the reasoning contained in the latest decision by the Supreme Court strongly strives, when it reads that "open areas are indispensable to the licensees of the stately areas in order to carry out their business activities; what matters for ICI purposes is that each area is likely to constitute a self-employed real estate unit, potentially productive of income".
Similarly, in the light of the events connected to stately areas in the Genoa harbor the second reasoning in the judgment seems clearly erroneous, when it considers that the Municipality may proceed to investigate without having to request for a preliminary cadastral classification made by the Territorial Agency on the assumption that “the delay of the Territorial Agency in concluding the cadastral registration process could not prevent the Municipality from exercising its taxing power through the redetermination of the tax base in relation to the areas under dispute and, therefore, through the redetermination of the tax amount due at least in temporary manner in lack of the definitive allocation of the cadastral value”.
We hope that when dealing with this subject matter in the next cases the Supreme Court will not feel restricted by the contents of here commented decision; a decision that, as increasingly happens, seems more in favor of State and other public bodies interest in acquiring revenues, regardless of the valid legal reasons and protection of citizens and entrepreneurs.
Dott.ssa Barbara Pollicina
PKF - Studio TCL Tax Consulting Legal
Genova – Milano