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15 Income taxes

 
 1st half 20101st half 2009Change
Prepaid, deferred and current taxes 50,91137,29313,618
Total50,91137,29313,618

The impact of income taxes on the pre-tax profit is 42.4%, compared to 41.8% in 2009.

In calculating the tax impact, a 6.5% increase was included of the IRES tax, the so-called “Robin tax”, applicable to companies which operate in the segment of gas and electricity production and/or sale.

While calculating taxes for the year, the effects resulting from the IAS tax reform introduced by Law no. 244 of 24 December 2007 were duly kept in consideration, and especially the derivation principle set out by Art. 83 of the Consolidation Act on Income Taxes which now sets out that for entities that apply international accounting standards, also notwithstanding provisions set out by the Consolidation Act on Income Taxes, “criteria regarding definition, time-based recognition and classification in the balance sheet, as set out by the above-mentioned accounting principles” shall apply.

Information on the "tax moratorium"

In accordance with Law Decree no. 10 of 15 February 2007, subsequently converted into Law no. 46 of 6 April 2007, governing the terms for reimbursement of government aid declared illegitimate by the Ruling of the European Commission no. 2003/193 dated 5 June 2002, on 6 April 2007 Hera Spa (with respect to the position regarding the former Seabo S.p.a.) was served the notices/orders issued by the Inland Revenue office responsible for the area, demanding the payment of a total amount of Euro 22,313 thousand for the four tax periods involved in the recovery. On 31 May 2007, Hera Spa filed an appeal against the aforementioned notices and injunctions with the Bologna provincial tax commission (Commissione Tributaria Provinciale di Bologna), requesting the suspension of the execution of these payment injunctions. On 6 July 2007, the Bologna provincial tax commission issued ordinances accepting the suspension requests made by the company, scheduling a hearing of the case for 13 December 2007. On 19 April 2008, notification was made that the appeals had been rejected, except for that relating to the tax period 1997. In this case, the commission recognised the legitimacy of the deduction of tax withheld and of the tax credit carried over from previous years. After the partial relief obtained on 2 May 2008 for taxes related to the 1997 tax period, following the approval of the above-mentioned withholding taxes and credits, equal to Euro 3,738 thousand, a payment was made for a total amount of Euro 17,400 thousand. Subsequently, on 11 September 2008, the Inland Revenue Office served a further tax payment slip regarding the payment of interest for the suspension period, then paid in December 2008, and amounting to Euro 660 thousand.

On 3 October 2008, appeals were filed against above-mentioned rulings. On 29 January 2010 the rulings, issued on 21 January 2010, were filed. Based on these rulings, the Emilia Romagna Regional Tax Commission rejected the appeals submitted by Hera Spa and reformed the first-instance rulings, rejecting the deduction made in the income returns submitted and related to withholding taxes paid; to this purpose, the amount expected to be paid, for only the capital share, is equal to Euro 3,362 thousand. As of today, the payment slip has not been received yet. The petitions to the Supreme Court were presented on 29 April 2010.

Please also note that, under the terms of agreements made between shareholders (and specified in the IPO prospectus) at the time of the incorporation giving rise to the creation of Hera Spa, local authorities undertook “to compensate Hera Spa for any cost, loss or damage sustained by the same in relation to mandatory regulatory measures revoking tax benefits that the company and the companies taking part in the incorporation have enjoyed”. Consequently, in relation to the above, no cost has been accounted for, also in consideration of future disbursements deriving from the second-instance ruling. It is also worth noting that on 31 December 2007, some Municipality Shareholders set up suitable guarantees in favour of the Company through the prepayments of amounts due to Hera Spa. Following the negative outcome of the first instance judgement and following payment of the tax assessments, debit/credit positions were therefore defined with respect to each Municipality.

On 30 June 2010, outstanding receivables for collection, related to all payments made by Hera spa for the position related to the former Seabo, up to 20 October 2009, amounted to Euro 1,595 thousand.

Regarding the former Meta Modena, merged into Hera with effect as from 31 December 2005, for which there was no indemnity mentioned above, pursuant to and in accordance with the Law Decree no. 10 of 15 February 2007, on 10 May 2007 the Inland Revenue Office of Modena served Hera Spa with notices and injunctions for the recovery of state aid relating to the tax periods 1997, 1998 and 1999. On 6 June 2007, Hera Spa filed applications for the amendment (“istanze di autotutela”) of such notices-injunctions. On 11 June 2007, the Inland Revenue office of Modena issued partial self-defence measures relating to the communicated notices/orders, requesting the Company, as a way of settling the issue, the payment of a minimal amount resulting from the failure to acknowledge withholding taxes paid.

Regarding the former SAT Sassuolo, which was incorporated into Hera as at 1 January 2008, on 3 and 17 April 2007, the company was issued with nine notices and injunctions by the regional revenue agency (six of these related to Alpegas and Seacs, companies that were already incorporated within SAT), and was asked to pay a total of Euro 9,502 thousand for the tax recovery periods in question. On 13 June 2007, the company filed appeals against these notices and injunctions with the provincial tax commission, requesting the suspension of the payment injunctions. On 30 July 2007, the company received nine demands for payment for Euro 10,194 thousand in total from the collection agency. On 19 September 2007, the provincial tax commission of Modena issued ordinances rejecting the suspension requests and scheduling a hearing of the case for 12 December 2007. On 10 March 2008, all the company’s appeals were formally rejected, and on 2 April 2008 and 10 June 2008 respective payments of Euro 7,334 thousand and Euro 3,216 thousand were made, amounting to Euro 10,550 thousand in total. On 12 March 2009, appeals against the first-instance rulings were presented to the Bologna regional tax commission. The Regional tax commission's judgements, stated on 13 November 2009, rejected the appeals, confirming the first-instance decision.

The petitions to the Supreme Court were presented on 4 June 2010.


Updates 2008 – Law Decree no. 185/2008

Art. 24 of Law Decree no. 185 of 29 November 2008, converted with amendments into Law no. 2 of 28 January 2009, charged the Inland Revenue Office to recover aid equivalent to unpaid taxes and related interest "in order to totally implement" the afore-mentioned decision of the commission on 5 June 2002. As for this provision, on 30 April 2009, the Emilia Romagna Regional Management - Large Taxpayers Office, sent three assessment notices on the position of the former Meta for the 1997, 1998 and 1999 tax periods, taking due account of indications contained in the opinion expressed by the Presidency of the Council of Ministers on 28 April 2009, shared with the Attorney General, with special reference to the exclusion from the taxable basis of the following:

  • profits, which were reissued into the public circuit, as they were distributed, under the form of dividends, to public bodies shareholders
  • the portion of income regarding the electricity segment (net of profits distributed and related to the electricity segment itself).


On 8 May 2009, the amount of Euro 4,823 thousand was paid. On 7 July 2009, the company lodged appeals against the assessment notices at the Bologna provincial tax commission, asking for their cancellation. The hearing to discuss the case, already scheduled for 17 May 2010, has been postponed while waiting for the meeting for the proceedings to discuss the supplemental assessment notices, pending before section 17.

Always with reference to Art. 24 of the above-mentioned Law Decree no. 185 of 29 November 2008, as regards the position related to the former Seabo, on 12 June 2009 Hera filed before the Inland Revenue Office - Bologna 3 Office - and the Emilia Romagna Regional Management - Large Taxpayers Office, a request for partial cancellation of the notices and injunctions received on 6 April 2007 regarding tax recovery for years 1997, 1998 and 1999 on the de-taxation of profits distributed to Public Bodies, according to instructions contained in the opinion issued on 28 April 2009 by the Presidency of the Council of Ministers.

For more exhaustive information, it should be noted that on 11 June 2009 the First-Instance Court of the European Community issued rulings regarding the appeals filed by the Italian Government, together with some companies (A2A, Acea, Iride, etc.) against the decision of the European Commission 2003/193/EC. The decisions of the European Community court rejected, or declared not receivable, all appeals filed, thus confirming the legitimacy of the above-mentioned decision of the European Commission. Hera S.p.a. did not take part in the ruling in question for any of the positions mentioned above.

Updates 2008 – Law Decree no. 135/2001
Art. 19 of Law Decree no. 135 of 25 September 2009, published in the O.G. no. 223 of 25 September 2009, added subsection 1-bis to Art. 24 of Law Decree no. 185 of 29 November 2008, setting out the following:

  • while calculating the tax basis, in order to recover aid equivalent to unpaid taxes and related interest, capital gains resulting from extraordinary transactions are not relevant;
  • for the purposes of a correct calculation of the taxable basis, assessments issued by the Inland Revenue office can be however supplemented or increased through new notices;
  • the payment of amounts due based on the above-mentioned supplementary assessments should be made within the fifteenth day after the notification date of these assessments.


On 2 October 2009, the Emilia Romagna Regional Management - Large Taxpayers Office – sent two further assessment notices for the former company Meta Spa, regarding the 1998 and 1999 tax periods, as a “supplement" to notices already sent on 30 April 2009, in order to cancel two deductions made and previously accepted according to the opinion, shared by the Attorney General, expressed on 28 April 2009 by the Presidency of the Council of Ministers on profits, which were reissued into the public circuit due to the distribution to public bodies shareholders, and the further portion of profits made in the electricity segment. The amounts required total Euro 22,751 thousand, of which Euro 12,590 thousand related to the capital and Euro 10,161 thousand related to interest.

On the same date, the Emilia Romagna Regional Management - Large Taxpayers Office – sent four assessment notices for the former company Seabo Spa, regarding the 1997, 1998, 1999 – first half year and 1999 – second half year tax periods, in order to adopt the remarks already expressed in the report of 17 October 2005. These remarks could not be taken into account when the notices and injunctions were issued on 06 April 2007, as, at that time, Art. 1 of Law Decree no. 10 of 15 February 2007 granted the Inland Revenue Office powers of “simple settlement” of the income returns submitted by the taxpayer.

The amounts required for the former company Seabo, amounted to Euro 759 thousand, of which Euro 386 thousand was for the capital and Euro 373 thousand was for interest.

The total amounts required, by effect of the proceeding provided for by Art. 19 of Law Decree no. 135/2009, amounted therefore to Euro 23,510 thousand, and were paid on 20 October 2009.

On 27 November 2009, the Company filed six appeals to the Bologna provincial tax commission to cancel the assessment notices of 2 October 2009, regarding the positions of both former Seabo and former Meta. They appeared before the court on 01 December, and as of today the date for the public hearing procedure has not been set for any of the prepared appeals.

Except for the still-outstanding disputes, aimed at recovering what as already been paid, the entire "tax moratorium" situation shall be considered concluded, since future disbursements which create financial impacts on the Group's accounts are not expected.

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