Enel is an industrial group whose main activity translates into the generation, distribution and sale of electricity. For this 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.
Tax Control Framework
In addition to defining the methods for managing taxes, the Tax Control Framework, of which the tax strategy is a part, is also one of the tools for preventing offences that could engender criminal liabilities for the Company, as defined by Italian law in Legislative Decree 231 of June 8, 2001, and the associated reputational risks. In this vein, the Tax Control Framework integrates the requirements established by the organizational and management model, adopted by the Group’s Italian companies, and the requirements of the Enel Global Compliance Program, aimed at the Group’s foreign companies. There are rules and penalties if the Framework is not observed, and it is subject to verification by the supervisory body according to the processes and flows that regulate said body’s activities.
Tax transparency and reporting
The Group launched an internal process aimed at adopting a model of Total Tax Contribution for Italy and the main countries in which the Group is present, thus highlighting most of the taxes paid by the Group as well as withholdings.
The first reporting year will be 2017 (comparison made to 2016 data).
A complete list of the Enel Group’s subsidiaries is available in the Group Annual Report, available on the Company’s website.
Starting from 2018, the Group will present country-by-country reporting in compliance with the OECD Transfer Pricing Guidelines (i.e. the threetiered approach, presented through the Master File, Local File, and Country- by-Country Report); this report will show the tax position of the various Group companies.
Lastly, in order to strengthen transparency with tax authorities, the Enel Group promotes adherence to cooperative compliance strategies.
|Income taxes paid||mil euros||-1,579||-1,959||380||19|
|Europe and North Africa||mil euros||-28||-689||661||96|
|North and Central America||mil euros||-32||-60||28||46|
|South America||mil euros||-677||-47||-630||-|
|Sub-Saharan Africa and Asia||mil euros||-||-||-||-|
|Income taxes 3||mil euros||1,882||1,993||-111||-6|
|of which current taxes 4||mil euros||1.984||1.713||271||16|
|of which current taxes||mil euros||1,09||1,027||63||6|
|Iberia 1||mil euros||372||354||18||5|
|of which current taxes||mil euros||370||241||129||54|
|Europe and North Africa||mil euros||30||34||-4||-12|
|of which current taxes||mil euros||21||30||-9||-30|
|North and Central America||mil euros||-63||157||-220||-|
|of which current taxes||mil euros||44||39||5||13|
|South America||mil euros||586||442||144||33|
|of which current taxes||mil euros||806||677||129||19|
|Sub-Saharan Africa and Asia||mil euros||7||-3||10||-|
|of which current taxes||mil euros||-||-||-||-|
|Other 2||mil euros||-314||-232||-82||-35|
|of which current taxes||mil euros||-347||-301||-46||-15|
(2) Includes the Holdings: Enel SpA, Enel Finance International, Enel Iberia and Enel RE.
(3) A reduction in the tax burden depends on prepaid taxes and deferred tax reversals.
(4) Does not include tax credits on dividends from foreign subsidiaries of -58 million euro.