Enel is an industrial group whose main activity translates into the generation, distribution and sale of electricity. Forthis reason, the choice of countries where the Group operates is guided by business choices and not purely by tax reasons. In Enel’s organizational model, the Tax Affairs unit of the Holding performs, among others things, the role of defining the Group’s tax strategy by identifying, analyzing and managing the various optimization initiatives, monitoring the most important tax issues, and providing support to the various Business Lines. Alongside the Holding Function, the Tax Affairs units of the various countries, acting in accordance with the values and principles of the tax strategy defined by the Holding, are responsible for managing compliance, tax planning, and tax monitoring at the local level.
The tax strategy
The Enel Group’s tax strategy should be viewed as a set of principles and guidelines inspired by values of transparency and observance of the law. Approved by the Board of Directors, it enters into force from the first day after its approval and is published on the Enel Group’s website (www.enel.com). In addition to approving the Enel Group’s strategy, the Board of Directors ensures that is applied and understood throughout the Company through the governing bodies.
The Tax Control Framework, of which the tax strategy is a part, defines the procedures for managing the tax component. It is also one of the tools for preventing offenses from which corporate criminal liability may derive pursuant to Legislative Decree 231/01 and related reputational risks. In this vein, the Tax Control Framework integrates the provisions of the organizational and management model, adopted by the Italian companies of the Group, and the provisions of the Enel Global Compliance Program, addressed to the foreign companies of the Group.
Enel has adopted a Total Tax Contribution model for Italy and the main countries in which it operates, thus providing information on the major portion of the taxes paid and any withholdings. The first document prepared, disclosing data for 2018 and 2017 and available on the Enel website the importance the Group ascribes to fiscal matters and their social role.
This document, prepared by Enel SpA, is sent by the Italian tax authorities to the other EU Member States as well as to any other jurisdiction with which there is an agreement on these matters. Lastly, the Enel Group promotes participation in the co-operative compliance regimes to consolidate transparency before the tax authorities, through a constant and preventive dialogue with a view to a common assessment of situations that are liable to pose fiscal risks. Inclusion in this regime is predicated on the Company having set up an adequate system for reporting, management and control of fiscal risks, integrated within a larger system of internal control, in line with international best practices.
Enel has participated in this regime with its Parent Company Enel SpA and its main Italian subsidiary, E-Distribuzione SpA, a firm that operates in the regulated market for electricity distribution and metering.
The information related to the 2018 Total Tax Contribution (2018 TTC) in the main countries in which the Enel Group operates is indicated below.
Total Tax Contribution (2018 TTC) in the main countries in which the Enel Group operates
|Total Tax Borne (1)|
|Income taxes (2)||mln euro||776,2||144,8||167,6||164,4||262,4||30,5||94,3||8,3||11,4||1659,8|
|Property taxes (3)||mln euro||125,9||71,0||18,8||2,4||1,6||0,4||11,8||19,7||2,6||254,2|
|Taxes on labor (4)||mln euro||545,1||124,4||110,8||-||13,0||22,9||1,8||9,7||2,8||830,6|
|Taxes on products and services (5)||mln euro||27,0||252,0||587,7||21,7||68,3||19,6||12,4||0,1||2,4||991,2|
|Environmental taxes (6)||mln euro||11,2||847,0||0,5||21,7||21,5||4,2||1,4||-||-||907,6|
|Total Tax Collected (7)|
|Income taxes (2)||mln euro||-||68,5||14,3||45,0||16,8||15,2||13,7||2,0||-||176,0|
|iProperty taxes (3)||mln euro||-||-||-||-||-||-||-||-||-||-|
|Taxes on labor (4)||mln euro||583,4||212,8||59,3||19,8||10,0||13,8||7,7||5,6||28,0||940,3|
|Taxes on products and services (5)||mln euro||7.633,7||1.291,6||2.103,4||128,2||18,0||94,9||69,1||50,0||146,0||11.534,8|
|Environmental taxes (6)||mln euro||-||543,0||-||3,3||10,8||-||-||-||-||557,1|
|Total Tax Contribution|
(cash accounting) - TTC
|EBT (exlcl. Dividends) (9)||mln euro||3.730,9||1.594,0||339,4||700,2||723,7||389,0||362,6||88,5||-42,8||7.885,5|
|TTC Index (10)||%||33,5||49,4||83,8||28,2||43,3||17,6||31,2||32,0||-55,0||42,5|
|Tax Borne in relation to revenues (12)||%||2,4||7,1||8,4||6,5||14,6||6,0||9,6||3,8||1,1||4,5|
|Tax Collectedin relation to revenues (13)||%||13,3||10,5||20,7||6,0||2,2||9,5||7,1||5,7||10,0||12,8|
|Tax value distributed t the company (14)||%||64,8||59,8||76,2||33,5||38,7||31,1||41,5||40,3||69,0||61,9|
(1) Taxes that represent a cost for Group companies and have an impact on the income statement.
(2) Taxes on company profits that are borne (with impact on profit and loss) and collected (without impact on profit and loss).
(3) Taxes (borne and collected) on the ownership, use or transfer of tangible or intangible property.
(4) Generally taxes, borne and collected, on employment (including income tax and social security payments). Taxes levied on the employer are considered taxes borne and taxes levied on the employee are considered taxes collected.
(5) Indirect taxes and duties (borne and collected) levied on the production, sale or use of goods and services, including taxes and duties levied on international trade and transactions.
(6) Taxes and duties (borne and collected) levied on the supply, use or consumption
of goods and services that are considered harmful to the environment.
(7) Taxes that do not represent a cost because Group companies act as a substitute
(8) The information is represented in line with local GAAP, consolidated data at country level (where present) or alternatively the sum of the values of the companies in the perimeter have been considered.
(9) It is considered net of dividends in order to avoid distortions on the effective tax rate.
(10) Total Tax Borne (cash accounting)/EBT.
(12) Total Tax Borne (cash accounting)/Revenues.
(13) Total Tax Collected (cash accounting)/Revenues.
(14) TTC/Value distributed (sum of: net interest, taxes, salariesand wages, income after taxes).