Portugal's tax watchdog investigating EDP's dams sale

LISBON, March 23 (Reuters) - Portugal’s tax watchdog is investigating a multi-billion euro sale of six dams by utility EDP to French firm Engie after opposition lawmakers claimed it used loopholes to avoid the payment of over 100 million euros ($118.60 million) in taxes.

In December 2019, EDP agreed to sell six hydroelectric power plants in the Douro basin to an international consortium led by Engie for 2.2 billion euros. The sale process was concluded a year later.

Over the past few weeks, Portuguese opposition lawmakers from parties on the left and right have accused EDP of setting up a financial scheme to avoid paying stamp duty taxes it was obliged to.

Finance Minister Joao Leao told a parliamentary committee on Tuesday the head of the tax authority had informed him they were already working on the case and were now gathering “preparatory elements” to force EDP to pay the taxes if they find out the firm actually used loopholes to avoid the payment.

EDP has denied any wrongdoing and chief executive Miguel Stilwell de Andrade said last week the sales model aimed to guarantee the dams would continue to operate smoothly and “not to avoid the payment of taxes”.

Leao said, “it is not up to the finance ministry to make any judgment in advance...(but) it is unacceptable that someone might avoid paying taxes using loopholes - for us this is very clear”, he said, adding the government would not intervene in the investigation.

Rui Rio, leader of the Social Democrats, the largest opposition party, said last week in parliament the government, led by Prime Minister Antonio Costa, was aware of the scheme “because EDP had always explained what it was going to do”. ($1 = 0.8432 euros) (Reporting by Sergio Goncalves; Editing by Catarina Demony and Alexandra Hudson)