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Tax Information Breakdown
It is a priority to clearly explain our tax contribution
To explain the importance of Endesa's tax contribution properly is a priority for the company from the point of view of transparency and corporate social responsibility.
Tax Contribution Report
Adequate explanation of Endesa´s tax contribution is a priority of the company from a transparency and corporate social responsibility perspective.
In line with this, since 2014, Endesa has been publicly providing a breakdown of the principle taxes paid in the countries in which it operates, which reflects the importance given by the Group to tax issues and its level of commitment to the principle stakeholders
Total Tax Contribution 2020: 3,484 M €
Data in million euros
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Medium Target Price € 1,742
Open Data Version
Source: PwC
Taxes borne 2020
Taxes borne by Endesa in year 2020, amounted to 1,410 million euros, among wich the planet taxes are the most important ones, accounting for the 53%. of taxes borne.
The main item of planet taxes borne by Endesa corresponds to the tax on the value of electricity production.
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Medium Target Price € 50
Open Data Version
Source: PwC
Tax contribution
Taxes collected 2020
Taxes collected by Endesa in 2019 amounted to 2,074 million euros.
A major part of these corresponds to taxes on products and services, mainly VAT, wich accounts for 58% of taxes collected.
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Medium Target Price € 50
Open Data Version
Source: PwC
Tax contribution of Endesa with respect to turnover in 2020
21%
for every 100 euros of net reveneus obtained by the Company, 21 euros are destined to paying taxes.
Of this amount, 9 euros correspond to taxes borne and 12 euros to taxes collected.
Total Tax Contribution Rate in 2020
48%
during the financial year 2020, taxes borne represent 48% of the total profit before all taxes borne.
Distributed Tax Value 2020
64%
of the value generated by Endesa has been paid to the Public Treasury in the form of taxes borne and taxes collected.
Of every 100 euros of value generated y the group in 2020, 64 euros were destined to the payment of taxes.
Geographic distribution of the tax contribution in 2020
For every 100 euros of taxes paid by Endesa worldwide, almost 90 euros are paid in Spain.
Source: PwC
Geographic distribution of the tax contribution in 2020.
Total amount of payments made to Public Administrations
Payments made by Endesa to Public Administration in 2020, including payments in respect of the rates subsidy and energy efficiency charges and other regulatory payments, amounted to a total of 3,557 million euros.
Source: PwC
Total Tax Contribution (TTC)
3.484 M €
Rates subsidy and similar
66 M €
Energy efficiency
27 M €
It is logical that Spain is the jurisdiction where ENDESA has, contributed most in tax payments, representing 90% of total taxes paid and collected by Endesa in the 2020 period. All of the information related to payment and collection of taxes by Endesa is included in the Non-Financial Information and Sustainability Statement , specifically in the section Tax Contribution 1.7.3. (within the section 10. Corporate Governance and Ethical Conduct), where the detail is provided per type of tax paid and collected by Endesa in each one of the countries in which it operates.
ENDESA's total tax contribution in 2020
Tax paid in the consolidated tax group
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
| Income Tax | 207 | - | - | - | - | - | - | - | - | - |
| Corporation Tax(1) | 207 | - | - | - | - | - | - | - | - | - |
| SUBTOTAL TAXES PAIS TAX GROUP | 207 | - | - | - | - | - | - | - | - | - |
Tax paid to the treasury
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
| Income Tax | 36 | 74 | 10 | 0 | 3 | 0 | -2 | 0 | 0 | 0 |
| Corporation Income Tax | 12 | - | 10 | - | 2 | - | -2 | - | - | - |
| Tax on Tanding Income | 23 | - | - | - | 1 | - | - | - | - | - |
| Other withholdings | 1 | 74 | - | - | - | - | - | - | - | - |
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
|
Property Tax |
70 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Real Estate Tax (municipal) | 66 | - | - | - | - | - | - | - | - | - |
| Others(2) | 4 | - | - | - | - | - | - | - | - | - |
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
|
TAXES ASSOCIATED WITH EMPLOYMENT |
135 | 253 | 1 | 1 | 2 | 0 | 0 | 0 | 0 | 0 |
| Payments made to the social Security system(3) | 135 | 27 | 1 | 1 | 2 | - | - | - | - | - |
| Withholding on eamed income | 0 | 256 | - | - | - | - | - | - | - | - |
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
|
Taxes on productsand services |
202 | 974 | 0 | 147 | 0 | 38 | 0 | 34 | 0 | 6 |
|
VAT paid(4) |
2 | 974 | - | 147 | - | 38 | - | 34 | - | 6 |
|
Public Domain Utilisation Fee |
173 |
- | - | - | - | - | - | - | - | - |
|
Miscellaneous public domain charges and others(5) |
27 |
- | - | - | - | - | - | - | - | - |
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
|
Environmental taxes |
731 | 449 | 15 | 9 | 1 | 45 | 0 | 28 | 0 | 16 |
|
Tax on the value of electricity production |
254 |
- | - | - | - | - | - | - | - | - |
|
Nuclear fuel tax |
134 |
- | - | - | - | - | - | - | - | - |
|
Hydroeletric fee |
32 |
- | - | - | - | - | - | - | - | - |
|
Nuclear Services Fees |
202 |
- | - | - | - | - | - | - | - | - |
| Environmental Taxes (regional) and others | 99 | - | 15 | - | 1 | - | - | - | - | - |
| Tax on Electricity | - | 415 | - | 4 | - | - | - | 28 | - | 11 |
| Hydrocaebon Tax | 1 | 34 | - | 5 | - | 45 | - | 0 | - | 5 |
|
Coal Tax |
9 | 0 | - | - | - | - | - | - | - | - |
| - | Amounts paid Spain | Amounts collected Spain | Amounts paid Portugal | Amounts collected Portugal | Amounts paid France |
Amounts
Collected
France |
Amounts paid Germany | Amounts collected Germany | Amounts paid Netherlands | Amounts collected Netherlands |
|---|---|---|---|---|---|---|---|---|---|---|
| SUBTOTAL TAXES PAID(6) | 1,174 | 1,750 | 26 | 157 | 6 | 83 | -2 | 62 | 0 | 22 |
Total tax contribution
| Amounts paid |
Amounts collected |
Total |
|---|---|---|
|
1,410 |
2,074 | 3,484 |
Other regulatory payments
| "Social Bonus" (special cheap rate) (Spain) | 48 |
| "Social Bonus" (special cheap rate) (Portugal) | 14 |
| Energy Efficiency (Spain) | 27 |
| Others (France) | 4 |
| SUBTOTAL OTHER REGULATORY PAYMENTS | 93 |
Total payments to public administrations
| Amounts paid |
Amounts collected |
Total |
|---|---|---|
|
1,503 |
2,074 |
3,577 |
The perimeter of companies can be consulted in Appendix I: “ENDESA Companies” of the Consolidated Annual Financial Report.
As a sample of our social commitment and commitment to equality and social cohesion, Endesa allocates 0,7% of the tax liability in the Corporate Income Tax declaration to the Third Sector, contributing to the financing of social projects.
Main Trends in Total Tax Contribution for 2020 compared with 2019
Data in millions of euros
2019
4.113 M
million euros
2020
3.484 M
million euros
Endesa's Tax Contribution in Spain has decreased by 15% compared to 2019, mainly as a result of the drop in energy sales caused by the COVID-19 crisis and the refunds received from Corporate Income Tax during 2020.
Context
The adverse economic conditions due to the crisis produced by the COVID-19 pandemic led to a contraction in the demand for electricity and gas during 2020, which had an impact on the macroeconomic variables of the ENDESA Group. During 2020 the mainland coal-fired power plants ceased operation as planned. Consistent with the contraction in demand and the reduction in prices for energy products, the total tax contribution decreased by 15% compared with 2019. In 2020, ENDESA's total tax contribution amounted to Euros 3,484 million, of which 40% corresponded to taxes incurred that represented a cost to ENDESA and 60% referred to taxes collected by ENDESA in carrying out its economic activity. Spain has been the jurisdiction where ENDESA has most contributed to the payment of taxes, representing 90% of the total taxes paid and collected in the year 2020.
Details of changes 2019-2020
In Spain, taxes borne decreased by 15%, mainly as a consequence of the following variables:
In Corporation Tax, the decrease was basically due to the following issues:
- Reimbursements deriving from definitive declarations: In January 2020, reimbursement of the 2018 Corporation Tax was received, and in addition reimbursement corresponding to the final declaration for 2019 was received. Normally this refund would be received in January 2021, but in this case there are cash inflows in respect of two definitive declarations in the same year.
- Impairment of coal plants. In 2020 the advance payments of Corporation Tax were reduced by the recovery of part of the accounting impairment of the coal plants recognised in 2019.
- There was a decrease in taxes on products and services (TOVP and other rates and royalties) associated with the fall in energy sales.
- Regarding environmental taxes, there are no significant differences because the effect of the fall in the Coal Tax and the Tax on the state hydraulic fee (produced in the first case by a lower use of this fuel and in the second by lower income from electricity production), is offset by the approval in 2020 of a new Ecotax in Catalonia and the update of the rate for nuclear services, which implies a higher cost.
Taxes collected in Spain decreased by 15%, mainly due to the following aspects:
- The increase in taxes associated with employment as a result of the increase in wages after the signing of the New Framework Agreement of the ENDESA Group was diluted with the reduction of the rest of the taxes collected.
- There was a decrease in VAT paid, mainly linked, on the one hand, to the contraction of sales and energy consumption during 2020, as well as to the increase in the Coefficient of Coverage in the part of renewable energies in Settlement No. 10 (the definitive one for 2019) with a direct impact on the Distribution business.
- There was also a reduction in the environmental taxes collected (special taxes on electricity and hydrocarbons), due to the drastic fall in 2020 in electricity consumption and energy demand.
Regarding the rest of the countries (Portugal, France, Germany and the Netherlands), there was a 50% increase in taxes borne due to the improvement in the tax result of the ENDESA Energía Branch in Portugal. On the other hand, taxes collected decreased by 2%, mainly due to the contraction in the demand for electricity and gas.
GLOSSARY
- TAXES BORNE: represent an actual cost for Endesa and are the taxes that Endesa has paid to the Administrations of different States in which it operates.
- TAXES COLLECTED: are those that have been paid in because of Endesa's economic activity but which, apart from the related management expenses, imply no cost for the Company. Taxes withheld on the earned income paid to workers are one example of what we refer to as a tax collected.
- TAX CONTRIBUTION WITH RESPECT TO TURNOVER: this is an indicator that reflects the extent of the contributions made by the Group in relation to the size of its business. This indicator is calculated as a relation between the Total Tax Contribution (TTC) and the revenues.
- TAX VALUE DISTRUBITED TO SOCIETY: this concept refers to the contribution that the Company gives to society in general. According to the TTC methodology, the distributed value of a company is made up of the sum of the following elements: taxes borne and collected (distributed value to Public Administrations), net interests (distributed value to creditors), wages and salaries net of taxes (distributed value to employees), incomes allocated to dividends (value distributed to shareholders). This ratio indicates the percentage of the total value generated by ENDESA that is used to pay taxes borne and collected by Public Administrations.
- TOTAL TAX CONTRIBUTION RATE: is an indicator of the costs of taxes borne in relation to profits obtained. It is calculated as the percentage of the taxes borne in relation to the profit before these taxes, taking into account consolidated figures that include the activity carried out by ENDESA at a global level.
Paid Taxes
| Spain | Portugal | France | Germany | Netherlands | TOTAL | |
|---|---|---|---|---|---|---|
| Taxes Borne | 1.381 | 26 | 6 | -2 | 0 | 1.410 |
| Tax collected | 1.750 | 157 | 83 | 62 | 22 | 2.074 |
| Total Tax Contribution | 3.131 | 183 | 89 | 60 | 22 | 3.484 |
| Tax Contribution as % of total | 90% | 5% | 3% | 2% | 1% | 100% |
Other regulatory payments
| Spain | Portugal | France | Germany | Netherlands | TOTAL | |
|---|---|---|---|---|---|---|
| Social rate | 48 | 14 | 0 | 0 | 0 | 62 |
| Energy efficiency | 27 | 0 | 0 | 0 | 0 | 27 |
| Other | 0 | 0 | 4 | 0 | 0 | 4 |
| Total Other Payments to Public Administrations | 75 | 14 | 4 | 0 | 0 | 93 |
Total payments made to public administrations
| Spain | Portugal | France | Germany | Netherlands | TOTAL | |
|---|---|---|---|---|---|---|
|
TOTAL
PAYMENTS
MADE |
3.206 | 197 | 93 | 60 | 22 | 3.577 |
Downloads
Financial Tax Information
On the other hand, it is important to highlight that all of the information related to the configuration of Endesa´s Tax Expense is contained in detail in its Consolidated Financial Statements and in the Standalone Financial Statements and those of each subsidiary, specifically in Note 31denominated Corporate Income Tax. Therein exists a detailed composition of the tax expense and a conciliation between the accounting result and tax base, between the amount of tax to be paid and the tax expense and between the accounting result and the tax expense.
Additionally, in the Endesa´s Consolidated Financial Statements and in the Standalone Financial Statements and those of each subsidiary, specifically in Note 16.3, a detailed breakdown is given regarding the principle relevant tax litigations.
Non-Financial Tax Information
Endesa, being a company depending from Enel SpA, entity resident in Italy, is exempt from the obligation to supply to the Tax Authorities the information related to Corporate Income Tax paid in each of the jurisdictions where the company operates. In this case, it is Enel SpA that sends the information of its Group to the Italian Tax Authorities, including the detail of the Endesa Group, and it will be the Italian Tax Authorities that will share this information with the Spanish Tax Authorities.
The Law 11/2018, of 28th December modifies the Commercial Code and the Law of Capital Companies obliging in certain cases the inclusion of specific tax information in the non-financial information section of the financial statements of companies and groups: the earnings obtained country by country, the taxes on earnings paid and the public grants received. Endesa has decided to go a step further and publish the detail per country in which it operates other information of relevance requested by distinct interest groups. The corresponding information for the Endesa Group has been verified by an independent service provider as follows:
|
Country |
Accounting Before Tax |
Intragroup transactions |
Total |
|---|---|---|---|
| Spain | 15.437 | 476 | 15.913 |
| Portugal | 1.076 | - | 1.076 |
| France | 280 | - | 280 |
| Germany | 258 | - | 258 |
|
The Netherlands |
52 | - | 52 |
|
Marocco |
- | - | - |
| Country | Accounting Before Tax | Intragroup transactions | Total |
|---|---|---|---|
| Spain | 17.772 | 626 | 18.042 |
| Portugal | 1.075 | - | 1.075 |
| France | 425 | - | 425 |
| Germany | 260 | - | 260 |
| The Netherlands | - | - | - |
| Marocco | - | - | - |
Data in million €
| Country | Income Tax Paid¹ | Accrued Income Tax² | Accumulated earnings | Tangible Assets other than cash and cash Equivalents | ENDESA Profit/loss for the year (Parent Company) | Number of employees by geographic location |
|---|---|---|---|---|---|---|
| Spain |
219 |
280 |
5.042 |
20.989 |
1.368 |
9.469 |
| Portugal |
10 |
7 |
33 |
361 |
38 |
61 |
| France |
2 |
- |
26 |
4 |
-5 |
48 |
| Germany |
-2 |
- | - | - |
2 |
9 |
| Netherland | - | - | 1 | - | -10 | 4 |
| Marocco | - | - | - | - |
1 |
- |
| Country | Income Tax Paid¹ | Accrued Income Tax² | Accumulated earnings | Tangible Assets other than cash and cash Equivalents | ENDESA Profit/loss for the year (Parent Company) | Number of employees by geographic location |
|---|---|---|---|---|---|---|
| Spain | 444 | 416 | 6,898 | 20,957 | 112 | 9,839 |
| Portugal | -4 | 4 | (6) | 367 | 33 | 60 |
| France | - | 2 | 3 | 5 | 23 | 44 |
| Germany | - | - | - | - | 1 | 9 |
| Netherlands | - | - | 2 | - | - | - |
| Marocco | - | - | - | - | 2 | - |
Data in million €
Total amount of Accounting Results Breakdown by countries in which ENDESA operates
| Country | Spain | Portugal | France | Germany | Netherlands | Morocco | Total |
|---|---|---|---|---|---|---|---|
| Total revenue | 15,913 | 1,076 | 280 | 258 | 52 | 0 | 17.579 |
| Accounting profit before tax(1) | 1.745 | 60 | -6 | -2 | -10 | 1 | 1,788 |
| Income tax paid(2) | 219 | 10 | 2 | -2 | - | - | 229 |
| Accrued income tax(3) | 280 | 7 | - | - | - | - | 287 |
| Accumulated earnings | 5,042 | 33 | 26 | - | - | - | 5,101 |
| Cash and cash equivalents | 20,989 | 361 | 4 | - | - | - | 21.354 |
| Number of employees(4) | 9,469 | 61 | 48 | 9 | 4 | - | 9,591 |
| Public grants received(5) | 0,5 | - | - | - | - | - | 0,5 |
Notes
The criterion for determining the accounting result is on a consolidated basis.
The criterion for determining the accounting result is on a consolidated basis. ?The figure corresponding to Income Tax corresponds to Corporate Income Tax paid/received in the reporting period. In this case, we would point Out that ENDESA and its subsidiaries resident in Spain which are 100% owned, are part of the Tax Consolidation Group whose parent company is ENEL S.p.a., the Company representing the Tax Group in Spain being ENEL Iberia, S.L. Therefore, the figure recorded is the amount paid/collected By ENDESA and its subsidiaries included in the Tax Group, to ENEL Iberia, S.L., which, in accordance with the tax regulations declares and settles The tax of the Tax Group with the Tax Administration. On the other hand, for the rest of the subsidiaries of the consolidated commercial group that Are not part of the fiscal consolidation group, the amount paid / charged to the Tax Administration is taken into account.Morocco consolidates in the group by the equity method, so the accounting result corresponds to the result after taxes in the percentage in which ENDESA participates.Accrued Income Tax corresponds to the Current Corporation Tax recognised in the period.The employee figure refers to the number of active employees at 31 December 2020.5 The figure for public grants received corresponds to the total amount of public grants received in 2020, all in Spain (their amount in 2019 being Euros 1.7 million, also in Spain). Until now the figure reported in this section was the balance of capital grants, the amount of which at 31 December 2020 was Euros 261 million (Euros 273 million at 31 December 2019).
Accrued Income Tax corresponds to the Current Corporation Tax recognised in the period.
The employee figure refers to the number of active employees at 31 December 2020.
The figure for public grants received corresponds to the total amount of public grants received in 2020, all in Spain (their amount in 2019 being Euros 1.7 million, also in Spain). Until now the figure reported in this section was the balance of capital grants, the amount of which at 31 December 2020 was Euros 261 million (Euros 273 million at 31 December 2019).
| 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|
| Public grants received (millions €) | 315 | 287 | 273 | 0,5 |
| Contributions to foundations and charities (millions €) | 3,71 | 4,94 | 4,18 | 27,2 |
Note: all of the public grants are received in Spain.
Notes
(+) Income Tax income, (-) Income tax expense. Refers to current year tax. The criterion for determining the accounting result is on a consolidated basis. The data corresponding to the Income Tax corresponds to the Corporate Income Tax paid/collected in the reporting period. In this case, indicate that ENDESA and its subsidiaries resident in Spain which are 100% owned, are part of the Tax Consolidation Group whose parent company is ENEL S.p.a., with the Company representing the Tax Group in Spain being ENEL Iberia, S.L. Therefore, the data that is recorded is the amount paid/collected by ENDESA and its subsidiaries included in the Tax Group, to ENEL Iberia, S.L., who, in accordance with the regulations of the Tax, declares and liquidates the tax of the Tax Group before the Tax Administration. On the other hand, for the rest of the subsidiaries of the consolidated commercial group that are not part of the fiscal consolidation group, the amount paid / charged to the Tax Administration is taken into account. Morocco consolidates in the group by the equity method, so the accounting result corresponds to the result after taxes in the percentage in which ENDESA participates.
The data of the Income Tax Accrued corresponds to the Current Corporate Income Tax registered in the period.
The employee figure refers to the number of active employees at 31 December 2020.
The figure for public grants received corresponds to the total amount of public grants received in 2020, all in Spain (their amount in 2019 being Euros 1.7 million, also in Spain). Until now the figure reported in this section was the balance of capital grants, the amount of which at 31 December 2020 was Euros 261 million (Euros 273 million at 31 December 2019).
The figure for public grants received corresponds to the total amount of public grants received in 2020, all in Spain (their amount in 2019 being Euros 1.7 million, also in Spain). Until now the figure reported in this section was the balance of capital grants, the amount of which at 31 December 2020 was Euros 261 million (Euros 273 million at 31 December 2019).
Reconciliation of Corporate Income Tax Effective Rate
The Corporate Income Tax effective applicable to Endesa´s 2020 Consolidated Financial Statements is 21,7% versus a nominal rate of 25%. However, withough taking into account the impacts registered in the year related to the Decarbonisation Plan, the digitalisation of processes, the V Framework Collective Bargaining Agreement and the write-down of the Cash Generating Units for each one of the Non Peninsular Territories, the rate is situated in 22,5%. This is fundamentally due to the deductions and subsidies (-65M€) which principally include the Canary Islands benefits (-51M€), the expenses and provisions non-tax deductible (+22M€) and the regularisation dervied from the 2019 declaration presented in 2020 principally for R&D deductions and deductible expenses upon the approval of the Framework Collective Bargaining Agreement in 2020 (-17M€).
The detail of the Consolidated Income Statement of the 2020 and 2019 periods is the following:
|
Indicator |
Notes |
2020 |
|---|---|---|
|
Current income tax for the year |
- | 286 |
|
Deferred income tax for the year |
21 | 151 |
|
Adjustment of prior years |
- | (47) |
|
Income tax provisions |
- | (2) |
| TOTAL | - | 388 |
|
Indicator |
Notes |
2019 |
|---|---|---|
|
Current income tax for the year |
- | 438 |
|
Deferred income tax for the year |
21 | (416) |
|
Adjustment of prior years |
- | 26 |
|
Income tax provisions |
- | 2 |
| TOTAL | - | 50 |
In the current context, ENDESA's effective tax rate does not record significant impacts due to legislative changes adopted to mitigate the effects of the COVID-19 health crisis that affect Corporate Income Tax.
Reconciliation between accounting result and Corporate Income Tax expense
The 2020 and 2019 reconciliation of the accounting profit (loss) from continuing activities to the income tax expense is as follows:
|
Indicator |
Income Statement |
Rate (%) |
Income and expensesdirectly
recognisedin
equity |
Rate (%) |
Total |
Rate (%) |
|---|---|---|---|---|---|---|
|
Accounting profitafter income tax |
1.400 | - | (203) | - | 1.197 | - |
|
Income TaxExpense |
388 | - | (76) | - | 312 | - |
|
Accounting profitbefore tax |
1.788 | - | (279) | - | 1.509 | - |
|
Theoretical tax |
447 | 25,0 | (70) | 25,0 | 377 | 25,0 |
|
Permanent differences |
19 | - | (6) | - | 13 | - |
| - Impact of netgains/losses underthe equity method | (2) | - | - | - | (2) | - |
| - Unrecognised taxlosses | - | - | - | - | - | - |
|
-Canary IslandsInvestment Reserve(CIR) tax credit |
- | - | - | - | - | - |
| - Non-duducibleprovisions | 11 | - | - | - | 11 | - |
| - Consolidation adjustments and others | 10 | - | (6) | - | 4 | - |
|
Tax credits takento profit and loss |
(65) | - | - | - | (65) | - |
|
Prior years'adjustments andother deferredtaxes |
36 | - | - | - | 36 | - |
|
Tax impact inthe year |
437 | - |
(76) |
- | 361 | - |
| Indicator | Income Statement | Rate (%) | Income and expenses directly recognised in equity | Rate (%) | Total | Rate (%) |
|---|---|---|---|---|---|---|
| Accounting profit after income tax | 180 | - | (9) | - | 171 | - |
| Income Tax Expense | 50 | - | 9 | - | 59 | - |
| Accounting profit before tax | 230 | - | - | - | 230 | - |
| Theoretical tax | 58 | 25,0 | - | 25,0 | 58 | 25,0 |
| Permanent differences | 17 | - | 9 | - | 26 | - |
| - Impact of net gains/losses under the equity method | (4) | - | 1 | - | (3) | - |
| - Unrecognised tax losses | - | - | - | - | - | - |
| - Canary Islands Investment Reserve (CIR) tax credit | (1) | - | - | - | (1) | - |
| - Non-duducible provisions | 5 | - | - | - | 5 | - |
| - Consolidation adjustments and others | 17 | - | 8 | - | 25 | - |
| Tax credits taken to profit and loss | (31) | - | - | - | (31) | - |
| Prior years' adjustments and other deferred taxes | (22) | - | - | - | (22) | - |
| Tax impact in the year | 22 | 9,6 | 9 | - | 31 | 13,5 |
Data in million €
Reconciliation of net tax
In 2020 and 2019, the reconciliation of the income tax expense to the net tax from continuing activities is as follows:
|
Indicator |
Notes |
Income Statement |
Income and expensesdirectly recognisedin equity |
Total |
|---|---|---|---|---|
|
Tax impactin the year |
- | 437 | (76) | 361 |
|
Change indeferred tax |
21.1 y 21.2 | (151) | 76 | (75) |
|
Net tax payableon
continuing
operations |
- | 286 | - | 286 |
|
Indicator |
Notes |
Income Statement |
Income and expensesdirectly
recognisedin equity |
Total |
|---|---|---|---|---|
|
Tax impactin
the year |
22 | 22 | 9 | 31 |
|
Change indeferred tax |
21.1 y 21.2 | 416 | -9 | 407 |
|
Net tax
payableon continuing
operations |
438 | 438 | - | 438 |
Data in million €
Details of the income tax expense
The breakdown of the income tax expense for 2020 and 2019 is as follows:
|
Indicator |
Current tax |
Change in deferredtax (note 21) |
Total |
|---|---|---|---|
|
Recognition inthe
Income Statement,of wich: |
286 | 151 | 437 |
|
Net tax payableon
continuing operations |
286 | - | 286 |
|
Deferred taxes |
- | 151 | 151 |
| - Depreciation andamortisation of property,plant and equipment andintangible assests | - | 129 | 129 |
| -Provissions forpension funds andworkforce reductionplants | - | (4) | (4) |
| - Other provisions | - | 27 | 27 |
| - Tax loss carryfowards | - | 8 | 8 |
| - Unsued tax credits | - | 7 | 7 |
| - Accelerated depreciationand amortisation of assestfor tax purposes | - | (17) |
(17) |
| - Other | - | 1 | 1 |
|
Recognition inequity, of wich: |
- | (76) | (76) |
|
Provisions for pensionfunds and workforcereduction plans |
- | (16) | (16) |
|
Other |
- | (60) | (60) |
|
Tax impact in the year |
286 | 75 | 361 |
| Indicator | Current tax | Change in deferred tax (note 21) | Total |
|---|---|---|---|
| Recognition in the Income Statement, of wich: | 438 | (416) | 22 |
| Net tax payable on continuing operations | 438 | - | 438 |
| Deferred taxes | - | (416) | (416) |
| - Depreciation and amortisation of property, plant and equipment and intangible assests | - | (336) | (336) |
| - Provissions for pension funds and workforce reduction plants | - | 16 | 16 |
| - Other provisions | - | (3) | (3) |
| - Tax loss carryfowards | - | 14 | 14 |
| - Unsued tax credits | - | 5 | 5 |
| - Accelerated depreciation and amortisation of assest for tax purposes | - | (64) | (64) |
| - Other | - | (48) | (48) |
| Recognition in equity, of wich: | - | 9 | 9 |
| Provisions for pension funds and workforce reduction plans | - | (34) | (34) |
| Other | - | 43 | 43 |
| Tax impact in the year | 438 | (407) | 31 |
Data in million €
During the years 2020 and 2019 the deductions and credits allocated to results were the following:
| 2020 | 2019 | |
|---|---|---|
| Deductions for Investments in New Fixed Assets in Canary Islands | 41 | 12 |
| Deductions for Donations to Non-Profit Entities | 11 | 3 |
| Tax credit for the production of tangible assets in the Canary Islands | 10 | 13 |
| Tax credit for Income Obtained in Ceuta and Melilla | 3 | 3 |
| Total Deductions and Credits Recognised in Profit and Loss | 65 | 31 |
Inspections
Periods open to review by the Tax Authorities
- In Spain, at the end of 2020 period the Tax Consolidation Group to which the Endesa Group belongs, is open to inspection on Corporate Income Tax for the periods 2006, 2015 and following years. Additionally, Endesa and the majority of its controlled subsidiaries have open to review, in general, the periods 2015 and following years for all others taxes applicable.
- In Portugal, France, The Netherlands and Germany, the subsidiaries and branches controlled by the Endesa Group in these countries, in general, have open to inspection the periods 2019 and following years, 2018 and following years and 2017 and following years, respectively.
Inspections in Progress
- In Spain, at the start of 2021, there are 571 inspection processes open by the Bodies of Inspection of State, Autonomous Community and Local Taxes.
The most relevant process is the one that relates to the Corporate Income Tax General Inspection for the periods 2015-2018 and VAT and Withholdings for the years 2015-2018 which affects the principal entities of the Group and started on 28 June 2019.
- In Portugal a process of Inspection of Endesa Generación Portugal is open regarding VAT and Corporate Income Tax for the period 2018.
Inspections Closed during 2020
- In Spain, during 2020 299 inspection processes have been closed, the majority related to Local Taxes and Taxes related to the Electric Sector, which have resulted in the signing of assessments in disagreement for 0.6M€ and assessments agreed with the Tax Authorities for an amount 3M€.
- In Portugal, during 2020 and at the start of 2021 3 inspections have been closed related to the Branch of Endesa Energía, S.A.U. in Portugal (for Electricity and Hidrocarbon Tax 2016 – 2019 and for Corporate Income Tax 2017 and 2018).
Litigations
The majority of the tax related litigation processes in the Endesa Group arise from processes of recovery of undue tax payments, whereby the Endesa Group pays the applicable taxes correctly and on time, but afterwards requests the refund of the amounts paid. The request is generally is rejected by the Tax Authorities and the Endesa Group challenges the assessment that rejects the request giving rise the start of a judiciary process.
This generally applies in matters where the Endesa Group considers that the law in question is not in line with the Spanish Constitution o European Law, and in matters where it does not share the interpretative criteria followed by the Tax Authorities. Following this strategy, the Endesa Group avoids the generation of contingencies in their Accounts, however, without losing the legitimate interest to defend its position in the Courts.
The most relevant processes are the following:
- The taxes regulated in Ley 15/2012 (Tax on the Value of Electric Energy Production, Tax on the storage of used nuclear fuel and radioactive waste in the power plant installations and the Hydraulic charges). The appeals are pending resolution in diverse judiciary authorities.
- Certain Autonomous Community taxes with an environmental motive (Taxes on emissions, taxes on waste, hydraulic charges, wind charges, taxes on installations that impact the environment, etc.). The appeals are pending resolution in diverse judiciary authorities.
- Certain Excise Taxes that tax the consumption of fuel for electricity production (Mineral Oil Tax and Coal Tax) which a disputable environmental motive. The appeals are pending resolution in diverse judiciary authorities.
- Corporate Income Tax from the 2006 period due to the taxation in this exercise of income from the refund of a tax declared unconstitutional. The refund request of undue amounts is based in the application of the Supreme Court doctrine that established the year in which the income should be computed as income for the purposes of Corporate Income Tax. The appeal is pending resolution in the National Court.
It is worth highlighting once again that for these processes, in case of loss, it would not result in a negative effect neither in terms of cash nor in terms of results for the Endesa Group, given that the taxes have been declared and paid. Exclusively in the case of success, there would be a favourable result, both in terms of cash and in terms of results for the Endesa Group.
Regarding the remainder of the processes, susceptible to generate a negative effect in the Group, the majority refer to procedures initiated by the Inspection bodies, which have been signed in disagreement by Endesa Group and have not been paid, the payment being suspended during the litigation process.
Before starting any litigation process of this nature, Endesa evaluates the possibility of loss in the highest court. In those processes where it estimated that there is more probability to lose rather than win, the contingent amount in dispute is provisioned in the accounts; no provision is made in other cases. The most relevant are highlighted below:
- A litigation regarding the proceedings initiated by the Inspection in 2017 of ENEL Green Power España, S.L.U. (EGPE) is ongoing in relation to Corporation Tax for the years 2010 to 2013.
The main issue under discussion concerns the applicability or otherwise of the tax neutrality regime to the merger of ENEL Green Power España, S.L.U. (EGPE) by absorption of ENEL Unión Fenosa Renovables, S.A. in 2011.
On 10 December 2019, a dismissal Resolution was obtained from the Central Economic Administrative Court on the Corporate Income Tax for 2011 (as regards the position of ENEL Green Power España, S.L.U. (EGPE) as successor to ENEL Unión Fenosa Renovables, S.A.) and it was decided to lodge an appeal with the National Court. Likewise, on 16 June 2020, a partial resolution was received for the Corporate Income Tax for the financial years 2010 to 2013, where the effects of the application of the tax neutrality regime in that period are discussed, which, in the same way, has decided to continue appealing before the National High Court.
The amounts in dispute amount to a total of 99M€, an accounting provision of 3M€ has been made. There is a guarantee covering the suspension of the debt.
- A litigation regarding the proceedings initiated by the Inspection in 2018 of Endesa and its principal subsidiaries in relation to Corporate Income Tax for the years 2011 to 2014.
The principal items in dispute stem mainly from the difference in criterion applied to the Corporate Income Tax deductibility of dismantling expenses, certain financial expenses, certain losses on sales and certain retribution of administrators who simultaneously work as part of the Top Management of the company; also the criteria of temporary imputation of income from taxes declared unconstitutional.
In 2018, the corresponding appeals where filed with the Central Economic-Administrative Court, which are pending resolution at the current date.
The amounts in dispute amount to 49M€, an accounting provision of 21M€ has been made. There is a guarantee covering the suspension of the debt.
- Litigation regarding the proceedings initiated by the Inspection in 2018 of Endesa and its principal subsidiaries in relation Valued Added Tax (VAT) of the periods 2012 to 2014. The principal items in dispute stem mainly from the application of the pro rata rule regarding financial income from derivatives.
In 2018, the corresponding appeals where filed with the Central Economic-Administrative Court, which are pending resolution at the current date.
The amounts in dispute amount to 16M€, an accounting provision of 14M€ has been made. There is a guarantee covering the suspension of the debt
- Litigations regarding the proceedings initiated by various Councils related to the Public Thoroughfare Occupation Tax.
The principal issue stems mainly from requirement by certain Councils of the tax in its general modality (tax on elements) when Endesa considers that this general modality is incompatible with the special modality, for which the Company is already paying (which implies a tax of 1.5% on the invoicing of commercial and distributor entities in the Municipality where they operate).
The litigation processes are numerous and are in various levels of the judicial authorities.
The amounts in dispute amount to 134M€, an accounting provision of 6M€ has been made.
In accordance with the provisions of the Corporate Enterprises Act, ENDESA's Board of Directors has the non-delegable power to approve the creation or taking of holdings in special purpose entities or entities domiciled in tax havens, as well as any other transactions or operations of an analogous nature that, due to their complexity, could undermine ENDESA's transparency.
ENDESA understands the concept of tax haven in relation to those territories considered as such by Spanish tax regulations, in accordance with Royal Decree 1080/1991 of July 5 which determines the countries or territories referred to by Articles 2, section 3, number 4, of Law 17/1991 of 27 May on Urgent Fiscal Measures, and 62 of Law 31/1990 of 27 December on General State Budgets for 1991. However, the territories included in the EU’s list of noncooperative jurisdictions for tax purposes (both the "black" and "grey" lists) and the jurisdictions analysed by the Global Forum on Transparency and Information Exchange within the OECD are also analysed, as are the lists issued by other organisations and NGOs.
ENDESA's policy is that investments are not made in or through territories classified as tax havens in order to reduce the tax burden. They are only carried out if there are important economic reasons that justify it other than the one mentioned. Furthermore, ENDESA has never used entities located in tax havens in order to hide the true owner of income, activities, assets or rights.
ENDESA has carried out in the past some non-material activity in other countries which, while not considered tax havens by the Spanish tax authorities, are considered by certain external observers as territories that they believe enjoy more favourable tax regimes than Spain.
At 31 December 2020, ENDESA does not have holdings in companies located in any territory classified as a tax haven or in any territory classified by third parties as having more favourable taxation than Spain. During 2020, the liquidation process of International ENDESA, B.V. (IEBV), based in the Netherlands, was concluded.