EDP is playing hard ball over the decision by public prosecutors ‘to order the payment of €335.2 million in unpaid taxes’ as a result of the sale five years ago of six hydroelectric dams.
This is a subject that has inflamed citizens and municipalities in Trás-os-Montes for the simple reason that they believe hundreds of millions of euros in benefits have been held back from them, incorrectly.
Last week, public prosecutors agreed with them – and have ostensibly ordered the AT tax authority to start requesting the missing money.
MPs in the affected areas have expressed their delight – but the government appears less effusive, as does EDP.
In an official statement released yesterday, an official source for the entity controlled by Chinese state-owned power company China Three Gorges, said EDP “will not fail to defend its interests and its understanding of the correct application of tax law”.
The sale of the six dams (to French energy company Engie) was “carried out in the only way that would ensure the continuity of operations and the maintenance of all the commitments necessary for the normal functioning of the portfolio in question (i.e. spin-off and subsequent sale of a company)”.
“EDP scrupulously complies with all its obligations, including tax obligations, and carried out this transaction under the tax framework in force at the date of the transaction,” said the statement.
The EDP group sold the six dams through an asset spin-off operation, followed by a merger.
The deal was agreed at the end of 2019 and completed a year later, between December 2020 and January 2021.
To complete the sale, EDP created a company called Camirengia in 2020, to which it transferred the operation of the dams. In turn, the buyer created the company Águas Profundas in 2019, which later changed its name to Movhera I – Hidroeléctricas do Norte. In January 2021, Camirengia merged with Movhera, formalising the sale through this incorporation.
Since the Tax and Customs Authority received the order from the public prosecutor’s office to collect the taxes, EDP says it “will remain available, as always, to cooperate with the authorities, namely the Tax Authority” to “provide any clarifications deemed necessary”, but “it will not hesitate to defend its interests”…
Bottom line: this drama is set to continue, and no money is likely to shower down on Trás-os-Montes communities just yet.
Source material: LUSA
