Tax transparency
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 Chile underlines the importance that we give to tax issues, to its social role and, in general, to transparency as a factor that encourages sustainable development, being the tax impact reported at risk management level as well as at performances level in the financial report and in a dedicated public document represented by the Total Tax Contribution that express the total impact in the Chilean society
Our approach to taxes
Honesty and integrity are core principles of our tax strategy as well as our commitment to transparency. Enel Chile tax strategy, principles and values are part of our public communication and information available to our multiple stakeholders.
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. Enel Chile, as an Enel Group’s subsidiary is 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, Enel Chile acts in accordance with the values of honesty and integrity in its tax management, being aware that tax revenue is one important source of contribution to economic and social development. According to our strategy of generating value impact at local level, whenever it is possible Enel Chile, by means of its subsidiaries, pay local taxes in the municipalities where the subsidiary operates.
Legality: Enel Chile pursues behavior 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: Enel Chile 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: Enel Chile 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 its assets and pursuing the primary interest of creating value for shareholders in the medium to long term.
Reporting
The Total Tax Contribution model has been adopted, by Enel Chile, communicating all taxes paid (as its own cost or as a substitute for tax).
Starting from 2018, we´ve started presenting the report in accordance with the recommendations provided by the OECD in the Transfer Pricing Guidelines (the so-called "three-tiered approach", articulated in the Master File, Local File, Country-by-Country Report). The report shows the aggregated data, among the others, revenues, profits (or losses) before income taxes, income taxes paid and accrued.
The first document prepared by Enel Chile, in 2018, followed by the report recently released in 2019, presents the payments made in 2018 and 2019, respectively, highlighting the importance that Enel Chile ascribes to fiscal matters and their social role as a significant contribution to the communities in which it operates. For 2020, the tax borne by Enel Chile amounted $36,864 million and the tax collected amounted $179,004 million, therefore, Enel Chile Total Tax Contribution amounted $215,868 million.