Tax Transparency Report
The countries included in the report represent more than 98% of total Enel Group revenues and 99% of income taxes paid. The distribution of the total contribution in the various countries in which the Group operates is 89% concentrated in Italy, Spain and Brazil, which represent of approximately 80% of Group revenues.
For details on minor countries, please refer to the Tax Transparency Report and the Sustainability Report.
Total Tax Contribution
The effects of the Covid-19 pandemic have influenced the demand for electricity and gas and, consequently, the total tax contribution. Despite the difficult economic conditions, the results of the analysis show that the tax contribution of the Enel Group in the main countries in which it is present remain very significant.
Total Tax Contribution in 2020 amounted to 16,100 million euro, with decrease of -12,5% compared to 2019, in which Enel had a total tax contribution of 18,395 million euro. In 2020, 26% of the total tax contribution corresponds to taxes borne and the remaining 74% to taxes collected.
Breakdown - Taxes borne
Taxes borne by Enel in 2020 amounted to 4,245 million euro. Most of this total corresponds to profit taxes, which account for 37% of taxes borne. Environmental, product and service, and employment taxes amount respectively to 20%, 19% and 18% of the total.
Breakdown - Taxes collected
Taxes collected by Enel in 2020 amounted to 11,855 million euro. Taxes on products and services represent 86% of tax collected by Enel due to specifics of its business and high volume of turnover, especially in Italy, Spain and Brazil.
Distributed Tax Value
- Taxes borne
Taxes borne are direct costs to Enel, which are the taxes that Enel has paid to the tax authorities of various jurisdictions, i.e. profit taxes, social contributions, property taxes, etc.
- Taxes collected
Taxes collected are the taxes that have been paid as a result of economic activities of Enel, they are not part of Enel’s own costs. Here the company is collecting taxes from others, on behalf of government, i.e. income taxes collected from employees under a payroll system.
- TTC with respect to turnover
TTC with respect to turnover is an indicator that reflects the extent of the contribution made by the Group in relation to the size of its business. The indicator is calculated as Total Tax Contribution divided by revenues.
- Total Tax Contribution Rate
The Total Tax Contribution Rate is an indicator of the cost represented by taxes borne in relation to profit obtained. The Total Tax Contribution Rate is calculated as the percentage of taxes borne with respect to profit before such taxes, based on Enel’s activities in the countries which are covered in this report.
- Cash Tax rate
The Cash Tax Rate represents the incidence of the tax burden, expressed in terms of taxes paid on the statutory result and is determined as the ratio between the corporate income taxes paid and the profit before income tax.
- Current Income Tax rate
The Current Income Tax Rate represents the incidence of the current (accounted for) tax burden on the statutory result and is determined as the ratio between corporate income taxes accrued on profit/loss Current taxes and the profit before income tax.
- Distributed Tax Value
The concept of distributed value refers to the contribution that the company makes to society in general.
According to the TTC methodology, the Value Distributed of a company is composed of the sum of the following elements: Taxes borne and collected (as value distributed to government), Net interest (as value distributed to creditors), Wages and salaries net of taxes (as value distributed to employees), Profits retained for reinvestment or paid as dividends (as value distributed to shareholders).
The Distributed Tax Value index illustrates the percentage of the value distributed by Enel used to pay taxes borne and collected to public administrations.
For the purposes of this calculation, the value to shareholders is represented by the amount of net profit after tax.
- Effective Tax Rate (ETR)
Represents the incidence of the overall tax burden (accounted for) on the statutory result and is determined as the ratio between corporate income taxes accrued on profit/loss and the Profit before Tax. Differently from the Current Income Tax Rate, in addition to current taxes, taxes also include (i) any provision for tax debts that are not yet certain as regards either their amount or existence, (ii) adjustments for income taxes relating to prior years, and (iii) deferred tax expense/income.