Cassation: Port authorities’ canons are not taxable

Last Updated: April 1, 2024

Porto di Palermo, terminati i lavori sulle banchine dei moli Vittorio Veneto e Santa Lucia

Explanations of the article:

The demesne canons of the Port Authorities are not taxable. This was decided by the tax section of the Court of Cassation in the appeal involving the Port Authority of Western Sicily. The judges of the tax section, chaired by Ettore Cirillo and rapporteur Andreina Giudicepietro, rejected the appeal of the Revenue Agency, affirming the non-taxability of the demesne canons related to the year 2006 of the port system authority of the western Sicilian sea.

The Supreme Court agreed with the Port Authority’s argument, defended by lawyer Angelo Cuva, that the port management entities are public and not economically relevant at a national level and with autonomous organization. In relation to the granting of maritime demesne concessions and the subsequent collection of the related canons, they perform a purely state function.

For the Port Authority of Palermo, now the Port System Authority of the Western Sicilian Sea, the Palermo Revenue Agency had requested, for 2006, the payment, as income tax, regional tax on productive activities, value-added tax, penalties, and interest, of a total amount exceeding 500,000 euros. Similar assessments of higher amounts were issued for other years, for example, for 2007 the assessment is 2,200,000 euros.

The Court referred to the rules stating that “acts of demesne concession issued by port authorities, by virtue of the legal nature of non-economic public entities of the same authorities, remain subject only to proportional registration tax and the related canons do not constitute taxable consideration for value-added tax purposes. Imposing or sanctioning acts based on the application of value-added tax to maritime demesne canons collected by port authorities lose their effectiveness and the related tax proceedings are extinguished.”

The Court extensively referred to the interpretative orientation of the State Council, invoked by the Port Authority, reaffirming that “the concessionary canon, an “imposed performance,” however, does not have a tax nature and cannot be considered as a mere lease fee since its structure and quantification contribute to the specific public interest embedded in the demesne asset.”