Breakdown of tax information

Tax contribution report

Properly explaining the importance of the Colonial Group's tax contribution is a priority for Colonial from the point of view of transparency and corporate social responsibility.

In this regard, Colonial publicly breaks down the main tax payments in those countries in which it operates, which reflects the importance given by Colonial to tax matters, as well as its level of commitment to the main stakeholders.

All this information can be accessed in the following document: Colonial Group tax contribution.

Status of main tax inspections and litigation

Inspections

Periods open to review by the Tax Authorities

In Spain, at the close of 2019, Colonial has 2014, 2015 and subsequent financial years open for inspection for Corporation Tax. Likewise, Colonial and its controlled subsidiaries have 2015 and subsequent years open to review, in general, for the other taxes that apply to them.

Inspections closed during 2019

In Spain, during 2019 an inspection process was closed regarding the tax on constructions, installations and works of the renovation works carried out in a property located in Barcelona.

Inspections in 2020

In Spain, at the beginning of 2020, there was an inspection process open regarding the inspection of the tax on construction, installation and works of the renovation works of a building located in Madrid. The process has already been completed without significant impact for Colonial.

During 2020, four inspection audits have been initiated by the local Inspection Bodies on taxes on constructions, installations and works of different works carried out in buildings in Barcelona and Madrid.

Litigation

Most of Colonial's tax litigation processes arise from a process for returning undue income, where the relevant taxes are paid in a timely manner, and subsequently the amount paid is requested to be refunded. Said refund request could be rejected by the Administration, in which case Colonial would challenge the refusal, thus starting court proceedings. By following this procedural strategy, Colonial avoids generating contingencies in its accounts without losing the legitimate interest to defend its position in the Courts.

The most significant litigation refer to the challenge of the tax on the Increase in Value of Urban Land derived from transferring certain properties where there was no increase in value between the time of acquisition and the time of transfer. In 2019, the two lawsuits of this nature that Colonial had filed were resolved, both in favour of its interests, and entailed 4.5 million euros being returned plus the corresponding default interest.

In addition, Colonial has several lawsuits regarding discrepancies in the cadastral values ​​of certain properties located in Madrid.

Colonial has no reserves for tax litigation, nor does it expect potential significant impacts derived from open litigation.

Low tax territories

Colonial's policy is that investments are not made in or through territories classified as tax havens with the intention of reducing the tax burden. Furthermore, Colonial does not use entities based in tax havens in order to hide the true owner of income, activities, assets or rights.