Endesa is committed to the promotion of cooperative relations with the Tax Administration in the different jurisdictions in which it operates.
Therefore, in Spain Endesa participated in the redaction of the Code of Good Tax Practices (CGTP) within the framework of the Forum of Large Companies, resulting in the constitution of an instrument for cooperative relations between the Tax Administration and Spanish Taxpayers.
Endesa and its controlled subsidiaries are signed up the CGTP since 2011 and it was subsequently ratified in 2016 due to the incorporation of an Annex that enhances the system with regard to the mandatory compliance conducts of the parties and in relation to the transparency of the information interchanged.
For its part, ENDESA's Board of Directors, in its meeting on 21 December 2020, 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.
Accordingly, specific mandatory compliance conducts have been developed for the administrators since 2016, which include:
- The company's tax strategy shall be developed and duly justified by the Board of Directors and sent to the company's senior managers.
- The Board of Directors shall approve all transactions and investments that pose a particular tax risk.
- The company's risk management policy shall adopt measures aimed at mitigating identified tax risks and shall establish internal corporate governance rules in such regard, compliance with which may be subject to verification.
- The company shall employ efficient information and internal control systems as regards tax risks, and the design and operation thereof shall be fully integrated into the company's general internal control systems.
- The company shall provide the Tax Administration with true and accurate information on the above points.
Additionally, in compliance with the Corporate Governance regulations for tax related issues and as foreseen in the Code of Good Tax Practices, the Audit and Compliance Committee (CAC) is periodically informed of the tax situation of the company. In the report of the integrated activities of the Committees of the Board of Directors it is evidenced that the Head of Tax Affairs has attended the CAC on three occasions during 2020 the CAC, who have been informed during 2020 of the Tax Policies followed by Endesa, receiving information about the update of Endesa´s Risk Management and Control Policy in order to adopt it to the UNE 19602 Standard on Tax Compliance Management and information regarding the adhesion by Endesa to the Codes of Good Tax Practices in France and Portugal. Additionally, they have received information about the tax situation of the company on a half-yearly basis. Likewise, the CAC designated the Risk Committee as the supervisory body of the Tax Compliance system, in accordance with the UNE 19602 Standard.
Some of these obligations were already in application in Endesa as they are foreseen in the Capital Corporations Law and as Endesa is a listed company.
In addition, pursuant to the mentioned Annex, since the period 2016 Endesa has voluntarily decided to submit the Enhanced Transparency Report to the Tax Administration in accordance with the enhanced good practices for tax transparency of the entities signed up to the CGTP. In this respect, the 2019 report was presented on the 16th July 2020.
In 2019 periodic meetings with the Tax Authorities were held in order to analyse the content of the Transparency Reports from 2017 and 2018 and at the start of 2020 a letter was received from the Tax Authorities confirming the adequacy of all of the information presented and thanking the disposition, collaboration and transparency of the entity towards the Authorities.
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 addition, 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 Spanish Gas Association (SEDIGAS), the Association of Electric Power Companies (AELEC) and the Spanish Confederation of Business Organisations (CEOE); in the latter case ENDESA participates on behalf of SEDIGAS. 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 2020, ENDESA's participated in the Report prepared by PwC on the Total Tax Contribution of IBEX 35 companies in 2019, which aims to study and promote the Total Tax Contribution of this group.