Committed to promoting cooperation-based relations with the tax authority

Endesa is committed to promoting cooperative relations with the Tax Administration in the different jurisdictions where it operates.

So in Spain, within the framework of the Large Companies Forum, it participated in the drafting of the Code of Good Tax Practices, which is an instrument for a cooperative relationship between the Tax Administration and Spanish taxpayers.

The Board of Directors of Endesa agreed to adherence to the Code of Good Tax Practices by Endesa and its controlled subsidiaries.

At a meeting on 21 December 2020, Endesa's Board of Directors agreed that Endesa and its controlled subsidiaries and branches in France and Portugal should subscribe to the Codes of Good Tax Practices existing in those countries.

In this regard, since 2016 certain mandatory behaviours have been developed for the administered party, which include the following:

• That the fiscal strategy of the entity has been set by the Board of Directors, is documented and is known by the senior managers of the company.

• That the Board of Directors has approved operations and investments of special fiscal risk. 
• That the company's risk management policy has considered measures to mitigate the identified tax risks and has established internal corporate governance rules in this area which can be verified for compliance. 
• That the company has used effective information systems and internal control of tax risks, insofar as their design and operation are fully integrated into the general internal control systems of the business it undertakes. 
• That the company has provided the Tax Administration with truthful information on the above points.

Likewise, in compliance with the Corporate Governance regulations with regard to tax issues and the provisions of the Code of Best Tax Practices, the Audit and Compliance Committee (CAC) is informed regularly about the company's tax situation. In the integrated report on the activities of the Board of Director's Committees it can be seen that the Head of Tax Affairs contacted the CAC in 2023, which was informed about Endesa's Tax Policies in 2023, and about the inspection of Endesa's Audit Department of the Tax Compliance Management System, in compliance with the UNE 19602 standard on Tax Compliance Management Systems to maintain Aenor's certification during the 2023 business year. In addition, it received information on the issuance of a Tax Transparency Report with all relevant information for third parties.

Some of these obligations were already applicable to Endesa because they are provided for in the Corporate Enterprises Act and Endesa is a listed entity.

In accordance with the provisions of the abovementioned Annex, Endesa has decided to voluntarily submit an Enhanced Transparency Report to the Tax Administration since 2016 as part of the scope for strengthening good tax transparency practices in companies adhering to the Code. In this regard, on July 21, 2023, the Report for the 2022 financial year was presented.

Relationship with Stakeholders

Endesa is firmly committed to endeavouring to explain in a transparent way tax matters that may be of interest to third parties. One of the company's values is tax transparency vis-à-vis third parties (shareholders, customers, suppliers, employees, regulators, Tax Administrations, etc.) on the principles of action in tax matters, on the bodies involved in Endesa's tax governance and on the details of its tax payments in the countries where it operates.

In this regard, Endesa provides through its website (https://www.endesa.com/es/nuestro-compromiso/transparencia), in a single space, important information on tax for third parties, and aiming to ensure that it is permanently updated, so that it is an information space that is easily accessible and understandable within the reach of anyone.

In addition, starting in 2020 Endesa now publishes an annual report on Tax Transparency which brings together all the information with tax content available on its website.

Likewise, Endesa actively participates in different forums on taxes, sustainability and corporate social responsibility, keeping up to date with news and practical improvements in the matter, the opinions and issues discussed in these forums serving for the continuous review of the information that is provided to the outside. It forms part of the tax committees of the Association of Electricity Companies (AELEC) and the Spanish Confederation of Business Organisations (CEOE); in the latter case Endesa participates on behalf of AELEC. Endesa is a member, through the head of its Tax Affairs Unit, of the Spanish Association of Tax Advisors (AEDAF). In 2019, Enel (Endesa's Parent Company) joined the European Business Tax Forum (EBTF - https://ebtforum.org), an association that aims to open a public debate on taxation by providing a balanced and comprehensive perspective on the tax that companies pay.

Endesa is part of the Large Companies Forum (a cooperative relationship body to promote greater collaboration between large companies and the State Tax Administration) and actively participates in it through two working groups.

In 2023, Endesa participated for the fourth year in a row in the Report prepared by PWC on the Total Tax Contribution of IBEX-35 companies in 2022, which aims to study and promote the Total Tax Contribution of this group.