Energy sector: the Regional Administrative Court of Lazio raised issues of constitutionality of the so called ‘Extraordinary Contribution’

On 16 January 2024, the Second Third Section of the Regional Administrative Court of Lazio issued five ordinances in proceedings brought by five different energy companies. With these measures, the Regional Administrative Court raised the issue of the constitutional legitimacy of Article 1, paragraphs 115-119, of Law No. 197 of 29 December 2022 (hereinafter, 'Budget Law 2023'), with reference to Articles 3, 53 and 117 of the Italian Constitution.

As is well known, in order to stem the effects of the increase in prices and tariffs in the energy sector on businesses and consumers, the so-called "Solidarity Contribution" was introduced, through Article 1, paragraphs 115-119, of the Budget Law 2023. It is similar to the temporary contribution already instituted by Regulation (EU) 2022/1854, aimed at affecting those economic operators who, by virtue of this increase, are presumed to have enjoyed greater revenues and profits. The purpose of the contribution, as highlighted by the European regulation, is to redistribute such sums between the subjects most affected by the increase in energy prices.

It should be pointed out that even before the intervention of the European legislator, the Italian Government (the "Draghi" one) had already introduced Article 37 of Legislative Decree No. 21 of 21 March 2022 (also known as the 'Ukraine Decree'), which imposed a non-deductible solidarity contribution on all energy sector operators, calculated on the increase between the balance of VAT active and passive transactions carried out during the period from 1.10.2021 to 30.4.2022 and the balance of those carried out during the period from 1.10.2020 to 31.3.2021.

Only later, following the adoption of the aforementioned EU regulation (No. 2022/1854), did the Italian Parliament approve the text of the law establishing the 2023 Solidarity Contribution, which was the subject of the orders under comment. This law appears, however, to depart - at least according to what emerges from the orders filed by the Regional Administrative Court of Lazio - from European legislation. And in fact, the court recognised both potential questions of constitutional illegitimacy (which, for the most part, were themselves grounds for challenging the acts appealed against) and potential questions of incompatibility with community norms, in the abstract capable of founding a preliminary reference to the Court of Justice of the European Union, pursuant to Article 267 of the Treaty. Before referring the matter to the Court of Luxembourg, however, the Collegium decided to give precedence to the centralised review of the Constitutional Court (also in line with a guideline of the same established in Judgment No. 269 of 14 December 2017), since, as noted in the measures under review, "a possible referral of the same question to the Court of Justice of the European Union would be useless, should the Constitutional Court uphold the question of the censured rules".

The first profile of unconstitutionality that emerges from the orders filed by the Regional Administrative Court of Lazio concerns, particularly the possible conflict of the measure introduced by the incumbent government with Article 117 of the Constitution, which, as is well known, sanctions respect for the constraints deriving from the EU system. In this sense, entering the merits of the issue, the Administrative Judge found a violation of Regulation (EU) 2022/1854 both from a subjective standpoint and with regard to the determination of the taxable base. In fact, with reference to the first aspect, the college pointed out that the Regulation in question makes no mention of companies engaged in the distribution, trade and import of petroleum products as taxable persons of the levy, while, with reference to the provisions concerning the taxable base, they subject to the levy amounts that the Community legislator, instead, does not classify as 'extra-profits'.

In other words, the payment of the contribution is requested to entities operating in sectors other than those indicated by the Regulation and on profits exceeding 10% of "the average of the total income determined pursuant to corporate income tax achieved in the four tax periods prior to the one in progress on 1 January 2022" and not 20%, as, instead, established by the European legislator. In addition to this, the Regional Administrative Court found that this provision would also conflict with the constitutional provisions (Articles 3 and 53 of the Italian Constitution), which, as is well known, enshrine respectively the principle of equality, proportionality and reasonableness and the principle of the ability to pay. In fact, the re-expansion of energy consumption as a result of Covid-19 was not taken into account in the determination of the taxable base, so that what is identified as 'extra profit' is nothing more than a return to the pre-pandemic business volume. There would also be a further violation with reference to the non-deductibility of the aforementioned contribution provided for by Article 37 of Law Decree No. 21/2022 from the aforementioned taxable base. In this regard, the Administrative Judge correctly points out that the first solidarity contribution, introduced by the previous executive, takes into account the "extra profits" accrued during a period partially overlapping with the period relevant for the purposes of the second contribution, which is being examined. This would therefore result in a double taxation of the same wealth.

Finally, a further conflict with Articles 3 and 53 of the Constitution would arise with reference to paragraph 118 of the provision under examination, which establishes the non-deductibility of the solidarity contribution from income tax and regional tax on productive activities. This provision is contrary, as noted by the Panel, to the Constitutional Court's well-established rule according to which "costs incurred in the course of business - if inherent - must be deductible for business income purposes".

In conclusion, the orders under comment appear to be acceptable, at least in part, in light of all the above. It is also clear from the orders that, if the question of legitimacy is not upheld by the Constitutional Court, the Regional Administrative Court will refer the matter to the Court of Justice of the European Union, pursuant to Article 267 of the Treaty.

Dott.ssa Federica Lo Presti 

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