Contribution by Niccolò Medica and Francesco Minas, published on Shipping Italy.

With judgment no. 86 of 27.1.2024, the Regional Administrative Court of Piedmont ruled on resolution no. 181/2021 of the ART (Transport Regulatory Authority), regulating the amount and methods of payment of the contribution owed to the ART itself for the year 2022, with particular reference to the provisions relating to maritime agents and brokers, included by the authority among the subjects required to pay the contribution in question.

In particular, with the aforementioned resolution, the ART provided, for maritime agents and brokers, two distinct contribution obligations:

• – the first related to the maritime agency/brokerage service performed in its own interest (art. 1, para. 1, letter m), and calculated on the basis of active items A1 and A5 of the last financial statement filed by the maritime agent/broker (art. 2, para. 2);
• – the second related to the maritime transport service for passengers and/or goods (art. 1, para. 1, letter l) performed, in the name and on behalf of foreign carriers, as broker/agent with representation (art. 2, para. 9, final period), and calculated on the basis of the active items of the foreign company’s financial statement attributable to operations carried out by the latter in Italy (art. 2, paras. 2 and 11).

The Regional Administrative Court of Piedmont, on the one hand, deemed legitimate the inclusion of maritime agencies and brokers among the subjects who, by reason of their activity, are required to pay the contribution in their own right, thus confirming the legitimacy of the first contribution obligation described above and, on the other hand, declared the second contribution obligation unlawful, thus annulling the resolution insofar as it provided, for maritime agents/brokers, substantially as tax substitutes, the further obligation to pay the contribution in the name and on behalf of foreign carriers, where represented.

With regard to the first contribution obligation, the Court reiterated its position that “The existence of a close nexus of ancillary nature and inherence of the service to the activities of freight transport carriers justifies its inclusion, not unreasonably, among the contributors (on this point see Regional Administrative Court of Turin, Section I, 16/03/2021 no. 291; Id. 16/11/2022 no. 984; Id. 13/10/2022 no. 848)“, emphasizing that this principle was also confirmed by the Council of State in a recent ruling (Council of State, Section VI, 09/05/2023, no. 4645).

However, it should be noted that, with regard to the inclusion of maritime agencies and brokers among the subjects required to pay the contribution in their own right, contrary opinions are numerous and it cannot be excluded that, at the judicial level, there may be, as has already occurred in the past, decisions in the opposite direction to that described above, also in consideration of new cases that may be submitted to the examination of the courts.

For example, the judgment of the Council of State no. 8628/2023 of 3.10.2023 notes that the Authority itself had substantially recognized, in a note to an operator in the sector, that it considered maritime agency and brokerage activities excluded from those relevant for the contribution obligation: although in the preamble of resolution no. 194/2023 the ART states that it considers such ruling not significant as it lacks general considerations on the inclusion of maritime agents and brokers within the contribution scope (and, indeed, the dispute appears to have been decided by the Council of State on other grounds), one cannot speak of a univocal and consolidated direction in this regard.

As for the second contribution obligation, the Regional Administrative Court of Piedmont held that it is incompatible with the principle of legal reserve and specificity applicable in tax matters, as developed by constitutional jurisprudence.

More specifically, the arguments of the Piedmont Court can be summarized as follows.

Given that the ART contribution is undoubtedly comparable to a periodic tax that accrues each year according to criteria sometimes different and annually defined by the Authority itself and that therefore falls within the scope of application of art. 23 of the Italian Constitution, remaining subject to the relative legal reserve provided therein, the fundamental elements of the tax requiring legislative predetermination are:

• – the taxable event (Constitutional Court, 06/07/1960 no. 51);
• – the taxpayers, including figures other than the taxpayer called to bear the levy, such as the tax substitute and the tax responsible party (Constitutional Court, 27/06/1959 no. 36; Constitutional Court, 18/06/1963 no. 93);
• – the taxable base and the (maximum) rate for determining the levy.

While the Constitutional Court has recognized that any indeterminacy of the tax provision may be filled through the strengthening of the so-called procedural legality, namely procedural forms open to the participation of interested parties and technical bodies (Constitutional Court, 22/02/2017 no. 69), on the other hand the same Constitutional Court reaffirms with rigor the “prescriptive character and the substance of the legal reserve in tax matters, requiring the prior legislative determination of ‘sufficient basic directive criteria and general lines of regulation of administrative discretion’ (judgments no. 350 of 2007 and no. 105 of 2003)”, or that ‘the concrete amount of the required performance be clearly ascertainable from the legislative measures concerning the activity of the administration (judgments no. 190 of 2007 and no. 115 of 2011)’ (Constitutional Court, 15/05/2015 no. 83)“.

Having regard to these normative premises and framing the contribution obligation provided for by ART resolution no. 181/2021 as “tax substitution”, said act is incompatible both with the principle of legal reserve and with that of specificity applicable in tax matters.

With regard to the aspects connected to the principle of legal reserve, a rigid legislative predetermination of the passive subject of the tax is necessary, including the person who, while not expressing the index of contributive capacity, is the recipient of the related obligation of a patrimonial nature.

Confirmation of the above is provided by the wording of art. 64 of Presidential Decree 29/09/1973 no. 600, where it qualifies as a substitute, for purposes of income tax, “anyone who by virtue of legal provisions is obligated to pay taxes in place of others, for facts or situations attributable to them and also as an advance payment“, thereby implying that the phenomenon of substitution (and the related right of recovery) is subordinated to an express legal provision.

Therefore, an act that imposes on a market operator a contribution obligation correlated to the economic activity carried out by another subject, and in substitution of the latter, can only be a law, and the provisions establishing the ART do not lend themselves to an interpretation that attributes to the Authority the power to issue a provision of such tenor.

Contrary to what the ART argued, the provisions governing the profession of maritime broker are not relevant (in particular arts. 3 and 5 of Law 135/1977): moreover, the ART resolution in question provides for a tax substitution and the taxable event is represented simply by the general inclusion of the economic operator in the Italian transport market, and its amount is determined on the basis of the shipowner’s annual turnover.

As correctly highlighted by the Court, the provisions governing the profession of maritime broker provide for joint and several liability (therefore not a substitution) of the broker with the foreign shipowner operating only in a subsidiary manner (that is, where the broker fails to comply with the obligation to obtain from its “principal” a sufficient currency availability to guarantee the fulfillment of obligations assumed on the occasion of the ship’s call) and that is correlated to obligations assumed by the shipowner through the broker that are attributable or connected to a specific ship and its related call.

Given the absence of normative foundation, the Regional Administrative Court of Piedmont holds that the ART resolution is seriously deficient also under the aspect of specificity of the taxable event.

The Piedmont judges emphasized that, in the absence of detailed provisions for the implementation of the contribution imposed on the broker “in the name and on behalf” of the represented carrier, each broker would be called upon to consult the financial statement of the foreign carrier and to verify which items are attributable to all operations carried out in Italy based on the annual turnover of the carrier for operations carried out in Italy: beyond the complexity – not to say impossibility – of the verification that each broker should perform, in fact the contribution would become due in full, notwithstanding that foreign carriers often resort to different mandataries for their operations in Italy, thus giving rise to “multiple tax obligations, all based on the same taxable event and correlated to the position of a single foreign carrier, and yet each attributable to different brokers“, in violation, as stated, of the principle of specificity.

According to the Court, the conclusions would not be different even if the provision of the ART resolution were considered not as a tax substitution but as a phenomenon of economic transfer of the tax on the representative (similarly to VAT recovery): indeed, in the event of a plurality of brokers, the shipowner could face multiple recoveries against a single contribution, with evident uncertainty regarding the actual attribution of the contribution burden and, in the event that the contribution had been borne upstream by a previous broker, the subsequent recoveries would be made following the complete settlement of the tax relationship between the carrier and the ART.

The judgment in question is part of a highly debated context that appears still far from being settled, also because, over the years, the criteria considered by the ART for identifying the subjects required to pay and the methods of calculating contributions have changed several times.

For example, ART resolution no. 194/2023 (dated 7.12.2023, therefore before the judgment subject to this note), regulating the amount and methods of payment of the contribution owed to the ART itself for the year 2024, sees the category of maritime agents and brokers again subject to the dual contribution obligation, but the methods of determining contributions have changed, where it is provided that “for subjects operating in the maritime transport sector and for other waterway transport of passengers and/or goods, the relevant turnover for determining the contribution is determined as follows: a) for international transport of passengers and goods, without prejudice to the possibility of a more precise quantification of the share attributable to the national leg, the turnover is determined by applying the flat-rate percentage of 5% to the overall value of transport services having origin/destination/call in Italy; b) for cabotage services, the general criteria indicated for all other transport companies apply“.

While on the one hand the flat-rate calculation mentioned above resulted from the ART’s acceptance of observations raised by industry associations (which had highlighted that for the purposes of calculating the contribution it was necessary to align with the guidelines provided by the Financial Administration, in particular in Circular no. 37/E of 29.7.2011 – Revenue Agency and Circular no. 11 of 07.03.1980 of the Ministry of Finance – Indirect Taxes and Duties on Business), on the other hand it cannot be overlooked that other arguments, raised during the consultation phase regarding the nature of joint and several liability between brokers and foreign shipowners but “rejected” by the ART, present strong similarities with those cited by judgment no. 86 of 27.1.2024 of the Regional Administrative Court of Piedmont.

It therefore appears evident that – also in consideration of the defect of violation of the principle of legal reserve and specificity applicable in tax matters that was raised by the Regional Administrative Court of Piedmont with regard to maritime agents/brokers to whom the contribution is requested to be paid in the name and on behalf of represented foreign carriers – the debate on contributions owed to the ART will continue, fueling uncertainties in a sector that, more than others, is heavily affected by current international tensions.