We strongly believe that tax transparency is another important dimension of sustainable finance.
Disclosure of our tax strategy and the details of our tax contribution in Italy and in the main countries where we operate on the company website underlines the importance that Enel Group gives to tax issues, to their social role and in general to transparency as a factor that encourages sustainable development.
Our approach to taxes
Honesty and integrity are core principles of our tax strategy as well as our commitment to transparency.
Tax strategy, governance and compliance
Since 2017, the Enel Group has adopted a tax strategy, as a set of principles and guidelines inspired by values of transparency and legality. The Group’s subsidiaries are required to adopt the tax strategy approved by the parent company, thereby assuming the responsibility of ensuring it is acknowledged and applied.
Tax strategy principles
Values: in line with its sustainability strategy, the Group acts in accordance with the values of honesty and integrity in its tax management, being aware that tax revenue is one of the main sources of contribution to economic and social development of the countries in where it operates.
Legality: the Group pursues behaviour geared towards compliance with the applicable tax rules and is committed to interpreting them in a way that respects both the substance and form.
Tone at the top: the Board of Directors has the role and responsibility of leading the dissemination of a corporate culture based on the values of honesty and integrity and the principle of legality.
Transparency: the Group maintains collaborative and transparent relations with tax authorities, enabling them – among other things – to gain a full understanding of the facts underlying the application of tax rules.
Shareholder value: the Group considers taxes as a business cost and, as such, believes that it must be managed in compliance with the principle of legality, with the aim of safeguarding the Group’s assets and pursuing the primary interest of creating value for shareholders in the medium to long term.
Tax governance, control and risk management
In Enel’s organisational model, the Holding Company’s Tax Affairs unit is tasked – among other things – with developing the Group’s tax strategy, identifying, analysing and managing the various optimisation initiatives, monitoring the key tax issues and providing its 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 set out by the holding company – are responsible for managing compliance, tax planning and tax monitoring at local level.
For the Enel Group, tax compliance is considered a key aspect of the Company’s ethical and responsible management. As such, the violations that can be reported through the Company’s internal channels also include those relating to tax.
The Group has a Tax Control Framework (TCF) whose main aim is to provide the Tax units with a single and consistent set of guidance for adopting a correct and effective approach to tax risk management within the Group. The framework sets out guidelines and methodological rules so as to consistently assess, monitor and manage the relevant tax risk for the Group companies, in accordance with the principles and guidelines set out by the tax strategy, and in the awareness that the Group companies operating in different jurisdictions must adopt the TCF with respect for the specific societal context and domestic regulations of the individual countries in question. In accordance with the principles and guidelines set out in the tax strategy, the Enel Group aims to proactively manage the tax risk and believes that adopting a TCF can ensure the timely detection, correct measurement and control of the risk tax.
Transparent relationship with stakeholders
The Enel Group ensures transparency and fairness in its relations with tax authorities, in the event of audits on both the Group companies and third parties. To consolidate this transparency with tax authorities, the Enel Group promotes engagement in co-operative compliance schemes for companies that integrate the requirements of their respective domestic regulations in order to reinforce their relations. Moreover, Enel consistently acts with a transparent and collaborative approach with all institutions and associations to support the development of effective tax systems in the various countries where it operates.
It is a priority to clearly explain our tax contribution.
Total Tax Contribution Report
As of 2018, Enel has adopted a Total Tax Contribution model (TTC) for Italy and the main countries where it operates, providing evidence of the taxes paid and withheld. The 2019 Report underlines the importance that the Group places on tax issues, their social role and transparency in general, as a driver of sustainable development.