Tax risk management

On 29 September 2015, the Board of Directors approved the aspects of the Tax Risk Management and Monitoring Policy of the Red Eléctrica Group and its integration into the Comprehensive Risk Management Policy.

Tax risks are understood as those produced by the application of the tax regulations, the interpretive complexity or the modifications in said regulations and the possible reputational impacts of the management of tax matters.

The action Guidelines for the management of tax risks are as follows:

The Red Eléctrica Group has a comprehensive risk management system that includes the tax risks relevant to the Group and the mechanisms for their mitigation, monitoring and management.

The Company also has a specific Internal Control System for Financial Information (ICSFI), which includes tax data and processes as well as the associated control mechanisms, based on the COSO (Committee of Sponsoring Organizations of the Treadway Commission) methodology. These processes and systems are systematically subject to internal and external audits.

In the matters regarding transfer pricing, the Red Eléctrica Group operates on the principle of full competition.