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03 September 2008
In 1995 the tax authorities asked Raffineria di Roma SpA to pay port tax due for the loading and unloading of goods on two loading platforms located at Fiumicino anchorage, around three miles off the Italian coast. Raffineria di Roma considered that the sum was not legally due, but paid the tax as requested with the intention of requesting a rebate.
On June 22 1995 Raffineria di Roma sued the Ministry of Finance for the amount paid and asked the judge to declare that the original payment had not been due.
On November 3 1997 the Court of Rome found in Raffineria di Roma's favour and ruled against the ministry, which then applied to the Rome Court of Appeal. On July 24 2000 the appeal court upheld the first instance decision. The ministry appealed to the Supreme Court.
The ministry challenged the appeal court's statement that the two platforms were not part of the port of Fiumicino and that therefore no port tax was due. The claimant argued that Law 84/1994 provides a wider definition of the term 'port' than the legislation it replaced. The Supreme Court found it necessary to consider all of the Italian regulations relating to ports, taking particular account of Article 4 of the law and its definition.
Article 4 distinguishes between military ports and civil ports, each with their surrounding military or civil port areas. Each such port and port area can be further classified on an economic basis as international, national or sub-national (ie, regional or inter-regional).
Furthermore, the law requires the minister of transport and navigation, having taken into account the port authority's opinion, to issue a decree to (i) define the area, classification and functional characteristics of each civil port, and (ii) state how each landing dock or other zone of the port fits the criteria of the category to which the port or port area is assigned. It follows that the word 'port' is used in Article 4 to refer to either a port or a port area; the relevant ministerial decree must distinguish between the two.
The court of appeal stated that the platforms did not belong to the port of Fiumicino, but it did not clarify whether Fiumicino's port area had been defined by ministerial decree or whether the port authority owned the platforms. For this reason, the Supreme Court upheld the ministry's argument on this point.
The ministry also challenged the court of appeal's position that port tax for the loading and unloading of goods duplicates a state tax. This challenge was well founded - the regulation of state tax is based on a general law whereas the regulation of port tax is based on a specific law, and the two laws do not conflict. The distinction is at an operational level: port tax is levied on merchandise that is loaded or unloaded at a port, whereas state tax is levied on the displacement of merchandise at any point along the coast (which includes ports, but also anchorages and beaches). The state tax on the loading and unloading of goods is an indirect tax based on the possession of such goods, whereas port tax is charged to companies that require authorization to operate in the port area. This does not make port tax directly and exclusively dependent on or proportionate to the port authorities' activity.
Port tax is payable in addition to state tax and is due in respect of the authorization procedures necessary to perform functions to load or unload the operator's goods. The port authority exercises its authorization function in the public interest. The port authority's function is merely to grant authorizations. Article 6(6) of the law prohibits it from undertaking port operations, reserving these and all directly connected activities to the relevant port companies. The only activities entrusted to the port authorities are public interest functions, such as coordination and authorization of port operations undertaken by private parties. Therefore, the Supreme Court held that port tax is not directly connected to the private use of services provided by the port authorities.
The court ruled that port taxes imposed under Article 28(6) for the loading and unloading of goods must be levied for each loading dock within the port area as defined by ministerial decree under Articles 4(4) and 6(7) of the law, regardless of the ownership of the port and of the actual use of port services.(1) The port area marks the boundary within which the competent port authority may exercise its administrative powers, but port tax for the loading and unloading of goods is not levied in proportion to the port authority's activity within the port area.
The court stated that the taxation system provided for in Article 28(6) must be applied in respect of each station within the port area. Its finding challenges the notion that port tax is a duplication of state tax and that the former is directly connected to the performance of services and the port authority's activity.
For further information on this topic please contact Gianfranco Puopolo or Lucilla Margherita at PGR&B Puopolo Geffers Rosen & Bosin by telephone (+39 02 7601 3359) or by fax (+39 02 7602 7478) or by email (firstname.lastname@example.org or email@example.com).
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