INPDAP (National Social Insurance Institute for Civil Servants) contributions

The Group employs staff registered with both INPDAP and INPS pension funds. Certain contribution rates applied by the two entities differ greatly; these include those for family benefit payments, for which INPDAP applies a rate of that is 3.72 percentage points higher than that applied by INPS.

In response to the failure to pass legislation bringing the pension and social security contributions into line, the Group companies decided that from November 2002 it would pay such contributions at the lower rate. On the other hand, the underlying legal basis is rather unclear: INPS circular no. 103 of 16 June 2002 reiterated that, whilst awaiting clarification from the Ministry of Economy and Finance and the Ministry of Labour, the rate of 6.20% applied to staff registered with the INPDAP pension fund, reduced to 4.15% for 2011 (although the differential of 3.72 percentage points with respect to staff registered with the INPS pension fund remained unchanged) was to be considered provisional.

In terms of legal action, ACEA, ACEA Distribuzione, ACEA Ato2, Laboratori and ACEA Luce, after appealing through the administrative courts, started legal action. The judgements handed down at first instance during the second half of 2006 found in favour of Laboratori and ACEA Luce (the latter being an ACEA Group company at the time), whilst the appeals submitted by ACEA, ACEA Distribuzione and ACEA Ato2 were turned down.

The second instance proceedings, launched by the companies or INPS in cases where the latter objected to the first instance rulings, met with the same unfavourable ruling for ACEA Group companies.

Appeals were submitted to the Supreme Court for Laboratori, Acea Energia (formerly AceaElectrabel Elettricità spa) and Acea Produzione (through succession of relations established by transferred company AceaElectrabel Produzione).

A similar problem regards contributions for maternity benefits, where the difference in the cost to companies, based on taxable pay, is 0.57 percentage points higher for staff covered by INPDAP compared with those covered by INPS. The ACEA Group applied a reduced rate as of October 2003 for said contribution too. It should be noted that as regards said contribution legislation was introduced with Law Decree no. 112 of 25/6/2008 converted with amendments into law no. 133 of 6/8/2008, where paragraph 2 of article 20 regulates, effective from 1 January 2009, uniformity of contributions for private employers across the board.

ACEA, ACEA Ato2, ACEA Ato5, ACEA Distribuzione, Arse, Acea Energia and Acea Produzione filed appeals which, although turned down, gave rise to the presentation of an appeal request which also ended unfavourably for said parties. Appeals lodged by Laboratori and ACEA Luce met with favourable outcomes, while under appeal these companies also met with an unfavourable outcome.

Following a series of unfavourable outcomes for Group companies, a Court of First Instance (in Brescia) has upheld the position taken by a former municipalised utility, recognising the company’s right to pay the above contributions at the reduced rate and declaring the tax demands issued by INPS to have no basis in law. The court’s opinion appears to be substantially in line with the arguments adopted in the appeals submitted by Group companies.

The Group made the necessary allocations to cover the risk related to these problems.

As a result of enforcement actions implemented by INPS through Equitalia for the sole purpose of avoiding the effects of the seizures performed pursuant to art. 48-bis of Presidential Decree 602/1973, in November 2011, ACEA, ACEA Ato2, ACEA Distribuzione, Acea Energia and Laboratori broke the payment requests issued by INPS relating to unpaid contributions totalling 15.6 million euros down into instalments.

The lack of legislative intervention, the negative and prolonged legal progress of the cases undertaken, and problems relating to the impossibility of obtaining the regular single insurance contribution payment certificate (DURC) for Group companies caused the company’s top management to implement actions to resolve the dispute by recognising the debt.

Meetings were held with INPS and Equitalia in the last quarter of 2012 in order to quantify the overall amount of indebtedness, and it was deemed opportune to request new payment extensions.

Beginning from December 2012 wages and salaries, the CUAF rate was aligned with what was requested by INPS.

During that same month, an extension of the payment of INPS tax demands in 72 instalments was requested and received from Equitalia regarding ACEA, ACEA Distribuzione and ACEA Ato2, for a total of 4.1 million euros. The extension also regarded, to a small extent, payment requests not issued by INPS. 

An analogous request was sent to INPS at the end of December for the debts assessed and not recorded in the delinquent tax list; in this case, the extension into 24 instalments obtained regarded, besides the Companies mentioned above, Laboratori, for a total of 16.2 million euros.

Please note that payment extension interest (accounted for without using the provision previously established) must be added to the cost so quantified, relative to the principal amount (contributions) and fines calculated until acceptance of the petition for payment in instalments.

For the other Group companies, it was decided to make a single payment for the debt recorded in the delinquent tax list (Equitalia) or still in the administrative phase (INPS).

Finally, activities are currently being planned to request the payment of the tax demands or debit advices which were previously “suspended” at the initiative of INPS or following legal action. In relation to the above, the Law Office that has handled the legal defence of Group companies over the years was requested to initiate the activities needed to formally conclude the dispute.