Tax Transparency Report

As of 2018 (2018-2017), we have adopted a Total Tax Contribution model for the main countries where we operate, providing evidence of taxes paid and withheld.

Beginning 2020 we adopted an integrated model: the Tax Transparency Report. This is prepared for all countries consistently with the rules provided for under OSCE Country-by-Country Report and includes information and data for Total Tax Contributions in the main countries where we are present.

The Group believes that this model ensures a broad vision and a detailed measurement of the organization’s contributions to economic and social development in the regions/countries in which it operates.

As the Report is aligned to GRI 207 provisions already with 2020 data, it underlines the importance that the Group attributes to tax related topics, to their social role and, in general, to transparency as a factor that facilitate sustainable development.

 

Geographic distribution of the tax contribution

The map shows the Enel Group’s Total Tax Contribution in the main countries where it operates. In 2020, this amounted to 16,100 million.

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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.

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Description Target Price (€) Recommendation Analyst
Taxes borne 26.00
Taxes collected 74.00
Medium Target Price € 50.00

Item

Amount (M/€)

Taxes borne

4,245

Taxes collected

11,855

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.

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Description Target Price (€) Recommendation Analyst
Environmental taxes 20.00
Employment taxes 18.00
Profit taxes 37.00
Property taxes 6.00
Taxes on products and services 19.00
Medium Target Price € 20.00

Breakdown - Taxes collected

Taxes collected by Enel in 2020 amounted to 11,855 million euroTaxes 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.

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Description Target Price (€) Recommendation Analyst
Taxes on products and services 86.00
Income taxes 1.00
Environmental taxes 4.00
Employment taxes 9.00
Medium Target Price € 25.00
Total Tax Contribution with respect to turnover
19.6%
For every 100 euro of revenue generated, 19.6 euro were used in payment of taxes, of which 5.20 euro were taxes borne and 14.40 euro were taxes collected.
Total Tax Contribution Rate
52.3%
The Total Tax Contribution Rate (TTCR) is equal to 52.3% in 2020 and to 65% in 2019. TTCR reveals the share of taxes borne on total profit before taxes borne.
Cash Tax rate
28.7%
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
39.7%
The Current Income Tax Rate is determined as the ratio between corporate income taxes accrued on profit/loss (Current taxes) and the profit before income tax is equal to 39.7%.
Distributed Tax Value
65%
For every 100 euro of value distributed, 65 euro were used for payment of taxes each year.
Effective Tax Rate (ETR)
33.7%
The ETR represents the incidence of the overall tax burden (accounted for) on the statutory result and is determined as the ratio between the total income taxes recorded in the financial statements and the consolidated profit before income tax.

Distributed Tax Value

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Description Target Price (€) Recommendation Analyst
Net interest 9.00
Wages and salaries 12.00
Taxes collected 48.00
Taxes borne 17.00
Income after taxes 14.00
Medium Target Price € 20.00
Item Amount (M/€) (%)
Net interest 2,114 9%
Wages and salaries 3,078 12%
Taxes collected 11,855 48%
Taxes borne 4,245 17%
Net income 3,474 14%
Total 24,766 100%

Glossary

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.