Committed to promoting cooperation-based relations with the tax authority

In Spain, within the framework of the Large Companies Forum, Endesa participated in the drafting of the Code of Best Tax Practices, which serves as the primary cooperative engagement mechanism between the Spanish Tax Authority and taxpayers. Following this, Endesa’s Board of Directors approved the company’s adherence, along with that of its controlled subsidiaries, to the Code.

Moreover, Endesa's Board of Directors, at its meeting on 21 December 2020, agreed that Endesa and its controlled subsidiaries and branches in France and Portugal will adhere to the Codes of Best Tax Practices in each of these countries. In France and Portugal, Endesa is subject to simplified versions of this code in those countries, in accordance with its size in those markets.

Since 2016, Endesa has developed and implemented a set of mandatory practices for the organisation, which include:

• The company’s tax strategy is defined by the Board of Directors, properly documented, and communicated to the company’s senior management.

• The Board of Directors approves transactions and investments that present significant tax risks. 

• The company’s risk management policies incorporate specific measures to mitigate identified tax risks and establish internal corporate governance rules regarding tax matters, the observance of which may be subject to verification. 

• Endesa deploys effective tax risk information and internal control systems, fully integrated into the company’s broader internal control frameworks. 

• The company provides accurate and truthful information to the Tax Authority regarding the above-mentioned processes and policies.

Besides, in compliance with Corporate Governance regulations regarding tax matters and as stipulated in the Code of Best Tax Practices, Endesa periodically informs the Audit and Compliance Committee (ACC) about the company’s tax situation. The integrated report on the activities of the Committees of the Board of Directors reflects that, in 2024, the Head of Tax Affairs reported to the ACC, which reviewed Endesa’s Tax Policies and received updates on the internal Audit review of Endesa’s Tax Compliance Management System. This system is certified under UNE 19602, the Spanish standard for Tax Compliance Management Systems, ensuring AENOR certification is maintained throughout 2024. Furthermore, the ACC received information on the issuance of a Tax Transparency Report with all relevant information for third parties.

Certain obligations already applied to Endesa as a listed company under the Spanish Capital Corporations Law.

Likewise, pursuant to the provisions of the aforementioned code, Endesa has voluntarily submitted an Enhanced Transparency Report to the Spanish Tax Authority each year since fiscal year 2016, as part of its ongoing commitment to the promotion of best practices in tax transparency. Therefore, on 22 July 2024, Endesa submitted the Report corresponding to fiscal year 2023.

In January 2025, Endesa voluntarily submitted its transfer pricing documentation for fiscal year 2023, in line with the proposal agreed upon at the plenary session of the Code Of Best Tax Practices held on 8 June 2023.

Cooperative relationship 

To achieve greater certainty in transfer pricing matters, the Endesa Group promotes the conclusion of Advance Pricing Agreements (APAs) with the Spanish Tax Administration Agency (AEAT). The APA process generally requires a prolonged timeframe for negotiation and approval.

In 2024, the following APAs were finalised:

• Technical and management support services agreement: sixteen of Endesa Group’s most significant subsidiaries held approved APAs with the AEAT covering their technical and management support service agreements with various Enel SpA Group companies for the 2017–2023 period. In 2024, these APAs were renewed for the 2024–2027 period. The aggregated annual value of these service contracts exceeds €100 million. In compliance with these APAs, Endesa provides the AEAT with detailed calculations of transfer pricing adjustments as part of its corporate income tax filings. These calculations demonstrate alignment with Endesa’s transfer pricing policy, verify the effective provision of services, and confirm compliance with contractual terms.

• Electricity supply to employees: Endesa concluded an APA with a three-year term (2024–2026) to establish the valuation of in-kind remuneration related to electricity supplied to employees. The reference price is determined based on commercial offers published by the National Commission on Markets and Competition (CNMC) from the country’s major energy retailers. These offers are collected during the last three months of each year, while an average price is calculated and submitted to the AEAT in advance for application to the following year’s employee electricity supplies.

Internationally, within the framework of Endesa’s cooperative relationship with the Tax Authority, discussions are underway with the authorities regarding a new transfer pricing remuneration model for Endesa’s branches in France and Portugal.

Stakeholder engagement

Endesa is firmly committed to transparently explaining tax issues that may be of interest to third parties. One of the company's core values is tax transparency towards external stakeholders (shareholders, customers, suppliers, employees, regulators, Tax Administrations, etc.) concerning the principles of action in tax matters, the bodies involved in Endesa's tax governance, and the details of its tax contributions in the countries where it operates.

In this regard, through its website, Endesa provides a dedicated space with relevant tax information for third parties, aimed at ensuring the ongoing updating of this information. Thus, it ensures an easily accessible and understandable information resource for anyone (https://www.endesa.com/en/our-commitment/transparency).

Additionally, since 2020, the company has published an annual report on tax transparency that consolidates all the available tax-related information on its website.

Furthermore, Endesa actively participates in various forums dedicated to taxation, sustainability, and corporate social responsibility. This participation allows the company to remain abreast of developments and best practices, using insights gained to continuously enhance its external tax disclosures.

Associations and Forums in which Endesa Participates:

• Spanish Association of Energy Companies (AELEC): Endesa is a member of AELEC and represents the association within the Spanish Confederation of Business Organisations (CEOE).

• Spanish Association of Tax Advisors (AEDAF): Endesa participates through its head of the Tax Affairs Unit, who is an active member of AEDAF’s Internal Tax Advisors Group.

• European Business Tax Forum (EBTF - https://ebtforum.org): in 2019, Endesa’s parent company, ENEL, joined this forum. This way, it promotes public debate on corporate taxation and provides a comprehensive perspective on business tax contributions.

• Large Companies Forum: this forum fosters greater collaboration between large corporations and the Spanish State Tax Administration. Endesa actively participates in two of the forum’s working groups.

Events and Conferences:

• PWC Report on the Total Tax Contribution of IBEX 35 companies: in 2024, Endesa participated for the fifth consecutive year in this report, which analyses and promotes the Total Tax Contribution of Spain’s leading listed entities.

• Conference organised by Deloitte Legal and El Confidencial: this event—known as the Observatory on Corporate Tax Advisory for Large Enterprises—presented the report La transformación de la función fiscal en la gran empresa española (The transformation of the tax function in major Spanish companies). 

• Forum organised by Expansión and Deloitte Legal: this forum addressed the challenges of implementing effective Environmental Taxation policies.

Indeed, Endesa’s participation in these forums and associations demonstrates its commitment to tax transparency and its ongoing efforts to enhance its practices in sustainability and corporate social responsibility.