PARENT COMPANY >
EXPLANATORY NOTES
296
| 2013 ANNUAL REPORT | PRYSMIAN GROUP
Taxes charged on profit before taxes differ from those calculated using the theoretical tax rate applying to the Company for the
following reasons:
23. CONTINGENT LIABILITIES
(in thousands of Euro)
2013
Tax rate
2012
Tax rate
Profit before taxes
156,441
90,922
Theoretical tax expense at Parent Company’s nominal tax rate
43,021
27.5%
25,004
27.5%
Dividends from subsidiaries
(57,439)
(36.7%)
(39,188)
(43.1%)
Other permanent differences
407
0.3%
854
0.9%
Tax credit paid abroad
(8,192)
(5.2%)
-
0.0%
Other
1,237
0.8%
(1,235)
(1.4%)
Net effect of group tax consolidation for the year
(7,278)
(4.7%)
(6,651)
(7.3%)
Effective income taxes
(28,244)
(18.1%)
(21,216)
(23.3%)
Since 2006 the Company, along with all its Italian resident
subsidiaries, has opted to file for tax on a group basis,
pursuant to art. 117 et seq. of the Italian Income Tax Code,
with the Company acting as the head of this group. The
intercompany transactions arising under such a group tax
consolidation are governed by specific rules and an agreement
between the participating companies, which involve common
procedures for applying the tax laws and regulations.
These rules were updated in 2008 to reflect the amendments
and additions introduced by Law 244 of 24 December 2007
(Finance Act 2008) and Legislative Decree 112 of 25 June
2008.
These rules were amended on 26 March 2012 to incorporate
in the transactions between the head of the tax group and
the individual participating companies, the amendments
introduced by Legislative Decree 201/2011 and the Ministerial
Decree dated 14 March 2012 concerning Aid for Economic
Growth.
Prysmian S.p.A. acts as the head of the tax group and
calculates a single taxable base for companies in the Italian
tax group. This has the benefit of being able to offset taxable
As a global operator, the Company is exposed to legal risks
primarily, by way of example, in the areas of product liability,
and environmental, antitrust and tax rules and regulations.
Outlays relating to current or future proceedings cannot be
predicted with certainty. The outcome of such proceedings
could result in the payment of costs that are not covered, or
not fully covered, by insurance, which would therefore have a
profits against tax losses in a single tax return, thereby
ensuring optimisation of the tax charge.
On 7 June 2012, the head of the tax group sent the required
notice of renewal of the group tax election for the three years
2012 – 2013 – 2014 for the following companies:
• Fibre Ottiche Sud – F.O.S. S.r.l.
• Prysmian Cavi e Sistemi S.r.l.
• Prysmian Cavi e Sistemi Italia S.r.l.
• Prysmian Treasury S.r.l.
This notice also included the election to include the Prysmian
Electronics S.r.l. in the group tax consolidation with effect
from 2012.
Prysmian PowerLink S.r.l. had renewed its election to file for
tax on a group basis for the three years 2011 - 2012 – 2013 on
7 June 2011.
The rate used for calculating the tax charge is 27.5% for IRES
(Italian corporate income tax), and 5.57% for IRAP (Italian
regional business tax).
direct effect on the Company’s financial position and results.
It is also reported, with reference to the Antitrust
investigations in the various jurisdictions involved, that the
only jurisdiction for which Prysmian S.p.A. has been unable to
estimate the related risk is Brazil.
