ERG Group Tax Strategy
The ERG Group Tax Strategy, approved by the ERG S.p.A. Board of Directors on 10 November 2020, is designed to pursue the long-term growth of the company's assets, protect the Group's reputation and preserve the interests of its shareholders and other stakeholders.
In particular, the Board of Directors defined and approved the ERG Group Tax Strategy with the goal of establishing the principles and guidelines that guarantee the consistent management of the ERG Group's taxes.
More specifically, the ERG Group Tax Strategy seeks to:
- guarantee the correct and prompt calculation and payment of taxes due by law and the fulfilment of connected obligations (tax compliance);
- mitigate tax risk, understood as the risk of infringing tax regulations or abusing the principles and purposes of tax legislation (abuse of rights).
As with the Group's Code of Ethics and Sustainability Policy, the ERG Group Tax Strategy is inspired by the principles of legality, correctness, transparency, honesty, integrity, the safeguarding of the company's assets and the creation of sustainable value over time.
The Italian and foreign subsidiary companies directly or indirectly controlled by ERG S.p.A. shall recognise the ERG Group's Tax Strategy, guaranteeing its dissemination and application.
The ERG Group Tax Strategy is the first pillar of the Tax Control Framework, the internal tax risk control system which will be adopted and implemented as of 1 January 2021 and applied to Fiscal Year 2020 by ERG S.p.A. and its Italian subsidiaries. Integrated in the broader ERG Group Internal Control and Risk Management System, the Tax Control Framework is designed to ensure, with reasonable certainty, that the business is managed in line with the principles and aims of the guidelines defined in the ERG Group's Tax Strategy, guaranteeing the prompt identification, management and monitoring of tax risk.
The most salient elements of the ERG Group Tax Control Framework are:
- governance, i.e. the accurate definition of roles and responsibilities for the management of tax issues;
- a system of data flows between the Tax business unit and the Group's other business units and between the main control functions involved in various ways in the Tax Control Framework;
- a Risk & Control Matrix (integrated on the basis of the Risk & Control Matrix pursuant to Italian Law No. 262/05) which describes the tax risks potentially applicable to company processes and the relative risk mitigation controls;
- a process for the periodic updating and monitoring of the Tax Control Framework, designed to guarantee the appropriateness and efficacy of its controls;
- a periodic report that illustrates the results of the checks on the Tax Control Framework and the measures to address any deficiencies that emerged during monitoring.
The approval of the ERG Group Tax Strategy, together with the adoption and implementation of the Tax Control Framework, form part of the Group's ESG (Environmental, Social, Governance) strategy, increasingly central to its business development model, and represent important tax control measures also in terms of compliance with Leg. Decree 231/01.