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||1,175||1,122|
|Income taxes on discontinued operations||0||11|
|Total income taxes||1,175||1,133|
The effective tax rate is equal to 34.7%, increased by 3.4 percentage points compared to the previous year (31.3% at 31 December 2019). The increase is essentially attributable to the higher incidence of some non-deductible charges.
Since 2016, a Tax Control Framework has been implemented for detecting, measuring, managing and controlling the tax risks. Currently (FY2020), the framework applies to the 8 Italian Companies (5 main insurance Companies, and to respectively a Company in the real estate, investments and services sector).
Starting from FY2019, some main foreign Companies have equipped themselves with a similar tax risk management system. Currently (FY2020) 12 foreign Companies belonging to the following countries are included in our Framework: Germany, France, The Netherlands, Spain and Austria.
The framework of the Companies that adopt the TCF is constantly evolving through the gradual extension to the main Italian and foreign Companies of the Group: during FY2021 a further 3 Italian Companies as well as 9 foreign Companies will join the framework.
The Tax Risk Management activities, with the aim of ensuring a correct implementation of the TCF, include four phases:
- Management of the Risk & Control Matrix;
- Drafting of the Monitoring Plan;
- Tax Risk Assessment;
- Testing activities.
The Group has an internal regulatory framework that governs the activities relating to the TCF in detail.
The framework is not yet mandatory for Italian companies and is part of OECD’s (Organization 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.
Please note that Assicurazioni Generali S.p.A. was officially admitted to the Cooperative Compliance programme with the Italian Tax Authority.
As institutional investors, we contribute to the development and financial stability of the countries through investment in government bonds of around € 194 billion. We also support the development of the real economy, including through investment in corporate bonds (non-financial) of around € 73 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, approved by the Board of Directors in 2020, is in line with international best practices and is an important aspect of the implementation of the Group’s sustainability strategy.