Tax Strategy and Taxes
Generali contributes significantly to the development and financial stability of the countries where it operates, covering a key role in a period where governments pursue the balance between growth and welfare.
The Group’s Italian and foreign companies pay income tax based on the rates and taxation rules set by the laws of each country.
|Total taxes of the period||1,122||1,126|
|Income taxes on discontinued operations||11||90|
|Total income taxes||1,133||1,216|
The effective tax rate is equal to 31.3%, that is slightly lower than that of the previous year (32.6% at 31 December 2018). In absolute terms, the impact of income taxes related to operating activities is essentially in line with the previous year.
Since 2016, a tax control framework has been implemented for detecting, measuring, managing and controlling tax risks at the parent company level. Currently (FY2019), the framework applies to the 5 main Italian insurance companies and to some German and French companies. A further gradual extension is currently underway with reference to the main Italian and foreign companies of the Group.
The framework is not yet mandatory for Italians operators and is part of OECD’s (Organisation for Economic Co-operation and Development) cooperative compliance. Its aim is to ensure the correct identification and appropriate control of tax risks through an approach based on an analysis that cuts across various corporate processes, in order to prevent or mitigate the risk of breaching tax regulations.
The framework includes five phases:
- definition of the annual plan of activities
- Identification / updating of risks
- analysis of the tax compliance of the processes
- analysis of the adequacy of the processes
- definition and implementation of corrective measures as a result of any shortcomings found in the two previous phases.
As required by local regulations, in 2017 the London branch adopted a tax strategy aimed at respecting local tax obligations and developing a relationship with the Inland Revenue based on the principles of collaboration and transparency.
As institutional investors, we contribute to the development and financial stability of the countries through investment in government bonds of around € 176 billion. We also support the development of the real economy, including through investment in corporate bonds (non-financial) of around € 71 billion.
Group’s Tax Strategy
The strategy is an essential part of the tax risk control system that defines sound and prudent taxation management methods for all of the Group’s companies. The Tax Strategy is in line with international best practices and is an important aspect of the implementation of the Group’s sustainability strategy.