9. Taxation - 86,052 thousand euros

Tax expenses for the year were 86,052 thousand euros compared to 60,737 thousand euros for the previous year. In order to make the comparison more useful, the difference in taxes including discontinued operations in the previous year is commented below.

Income taxes were estimated at 88,778 thousand euros (65,572 thousand euros as at 31 December 2011) and are essentially made up of:

  • Current taxes: 89,367 thousand euros (107,674 thousand euros at 31 December 2011),
  • Net deferred/(prepaid) taxes: - 589 thousand euros (-42,625 thousand euros in 2011).

The overall increase in taxes recorded for the year, equal to 23,206 thousand euros, is the result of the combined effect of the increase in profit before tax and the substantial cancellation of the positive effect of deferred taxation, as well as the effect of the IRES surcharge.

The change compared with last year reflects the following elements:

  1. 2011 was positively influenced by the substantial exemption (called the “participation exemption”) of capital gains from the sale of companies subject to the Framework Agreement signed by ACEA and GSEI in December 2010. That phenomenon positively affected the 2011 tax rate by roughly 7 percentage points,
  2. with regard to the IRES surcharge, please note that the full (negative) effects of the regulatory change introduced by Law Decree 138/2011 are felt beginning from the year just closed since in 2011 - the first year of application - the higher taxes produced were basically offset in the income statement with the redetermination of deferred taxes: in fact, from the economic perspective the period’s taxes decreased by roughly 5 million euros in 2011, while in 2012 the Group has posted approximately 9 million euros in costs for the IRES surcharge.

The worsening of deferred taxation by a total of 42,036 thousand euros is the result

  • of the aforementioned recalculation of ACEA Distribuzione’s deferred taxation in 2011 due to the IRES surcharge (16,200 thousand euros),
  • actions to limit the Group’s receivables, with particular reference to cancellations of receivables carried out during the year as well as the definitive closure of relations with the Roma Capitale Administration established by the Central Government. This resulted in greater use of prepaid taxes, by 10,322 thousand euros, compared to last year
  • 12,174 thousand euros less in allocations of prepaid taxes, essentially due to lower allocations made to the provisions for liabilities and charges,
  • the remaining part is due to the recalculation of Acea Energia’s prepaid taxes. 

Finally, taxes for the period include the estimate of the refund for the recognition of the deductibility of IRAP relating to staff costs for the years 2007/2001, equal to 15,815 thousand euros.

The table below shows the breakdown of taxes for the period and the correlated percentage weight calculated on consolidated income before taxes.

€ thousand 2012 % 2011 %
Profit before tax from continuing and discontinued operations 174,078   159,092  
Expected tax charge at 27.5% on profit before tax (A) 47,872 27.5% 43,750 27.5%
Net deferred taxation (B) (589) -0.3% (42,625) -26.8%
Permanent and additional differences (C) 14,998 8.6% 24,934 15.7%
IRES refund for IRAP (D) (15,815) -9.1%    
IRES (corporate income tax) for the year (E) = (A) + (B) + (C) + (D) 46,466 26.7% 26,060 16.4%
IRAP (F) 35,602 20.5% 32,801 20.6%
Tax Assets (G) 6,710 3.9% 6,710 4.2%
Tax on continuing and discontinued operations (E) + (F) + (G) 88,778 51.0% 65,572 41.2%

The tax rate for the year was 51.0% (41.2% in 2011).