The Portuguese official journal (Diário da República n.° 230) of 29 Sep 2004 contained the final text of the regulation on municipal rights-of-way taxes that ANACOM was required to adopt in application of the Law on electronic communications.
Article 106 of the law of 10 Feb 2004 is distinctly unusual, in that it entitles municipalities to receive a financial compensation for the utilisation of the public domain and of private properties belonging to municipalities, which is construed as a cap of maximum 0,25% of the value of the invoices that are sent by operators of public electronic communications networks and services provided at a fixed location, to their customers in a given municipality. Article 106.3 of the law stipulates that operators and service providers must include, on the invoices they send to their customers, the amount of tax to be paid, i.e. the operators and service providers are put in the position of being a collecting intermediary of a tax that is due by users of electronic communications. No compensation is provided to operators and service providers for the capex and opex they incur for acting as a tax collecting intermediary.
Regulamento n.º 38/2004, relativo aos procedimentos de cobrança e entrega aos municípios da taxa municipal de direitos de passagem (TMDP) of 29 Sep 2004 clarifies and puts into practice this unusual stipulation of the law.
The regulation (article 3) specifies that the tax is only to be levied on end-users, and not on wholesale customers. The same article clarifies that the tax is only applicable to electronic communications services, but not to other items which may appear on an invoice, such as fees for terminal equipment sales and rental, fees for technical support, fees for developing websites, fees for audiotext content, fees for listings in directories, etc. Article 3 also exempts public payphones and ‘virtual calling cards’ from the tax.
The regulation (article 4) addresses the location of end-users (given that each municipality will wish to receive the amounts due to it, and that the % of the tax could vary from one municipality to another). It specifies that the tax must be levied in relation to the physical location of the end-user, even if the invoice is sent to another address, and even in cases where single centralised invoicing is applied for large business customers. However, the same article accepts that in those cases where it is impossible to attribute an amount on an invoice to a specific location (e.g. leased lines from point A to point B), the invoicing or collection address may be used. In addition, article 7 grants a transition period until the end of 2005 for the establishment of the correct location of end-users (this is especially relevant for operators serving large business customers). Article 4 also requires municipalities to provide operators and service providers with a “conversion table” to match postal codes and municipalities.
Article 5 of the regulation specifies that operators and service providers must pay the tax amounts to the municipalities at the latest at the end of the month following the month in which money is collected from end-users (i.e. max. 2 months delay). The regulation (article 6) also requires operators and service providers to have an annual TMDP audit performed by an independent auditor (the auditors are to be accredited by ANACOM). Municipalities are entitled to request operators’ audit data from ANACOM.
Finally, article 7 requires operators and service providers to provide technical information to municipalities, concerning the physical location of systems and equipment, on the public domain and on the private property of municipalities, in order to enable municipalities to verify whether operators and service providers are or are not present on their territory.
The full text (in Portuguese) of Regulation n.º 38/2004 can be accessed by clicking here.
For a discussion, please contact Yves Blondeel.