Extraordinary Contribution on the Energy Sector

Constitucional Court Judgment

Judgement n.º 7/2019 - January 8th, 2019 – Case n.º 141/2016

In this case the Portuguese Constitutional Court appreciates the constitutionality of the norms included in articles 2º, 3º, 4º, 11º and 12º that established the legal framework of the "Extraordinary Contribution on the Energy Sector” (“CESE”), approved by the article 228º of Law n. º 83º-C/2013 of December 31th.

The appellant - REN, Armazenagem, S.A. (“REN”) - requested the declaration of CESE as an unconstitutional tribute with all the legal consequences, namely the reimbursement of sums unduly paid.

To support these requests the appellant alleged that the CESE was, in fact, a tax and its subjective and objective incidence violates several constitutional principles like the principles of contributory capacity, equality, the taxation of companies for real profit and the prohibition of the allocation of revenue to certain expenses.

Furthermore, REN alleged that even if CESE was considered a financial contribution, and not a tax, it would be a materially unconstitutional tribute because it constitutes an inadmissible restriction of the right of private propriety, violating the proportionality and the equality principles (the last one materialized by the equivalence principle).

Notwithstanding all these arguments, the Constitutional Court decided to dismiss the appeal. According to the Constitutional Court the principal purpose of CESE was the generic development of measures that contributed for the equilibrium and financial sustainability of the energetic sector.

For this reason, even if CESE didn’t imply a direct, specific and effective consideration (excluding the designation of fee) CESE had characteristics of a bilateral relation between the State and the passive subjects of the tribute, because of the connexion between the origin of the revenue and its destiny.

This synallagmatique relation not only justifies its qualification as a financial contribution but also legitimates CESE subjective and objective incidence, is amount and the way its collected. Concluding the Court that there was no violation of any constitutional principle.