Sustainability

Sustainability

Tax transparency

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 principles and guidelines that establish the framework for action regarding tax matters are those contained in the Tax Strategy of the Red Eléctrica Group.
  • A proactive and responsible vision regarding the management of tax risks shall be undertaken and maintained in all the companies that make up the Red Eléctrica Group.
  • The analysis of specific risks and the controls necessary to mitigate, manage and monitor such risks shall be made available to those responsible for activities regarding tax matters. In relation to the analysis of the tax risks regarding investments or transactions that are strategic or have a special tax risk due to their high cost or special characteristics, shall be submitted to the Board of Directors for their approval.
  • Relationships with the Tax Administrations will be fostered to reduce tax risks and prevent the conducts that may generate them.

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.