11. Taxes

Basic tax rules and tax risk management

The correct and complete fulfilment of tax obligations is an important area of attention. This concerns corporate income tax and all other taxes that apply to Enexis.

An individual Horizontal Monitoring Agreement was concluded with the Dutch Tax and Customs Administration in 2022. In this agreement, Enexis and the Tax and Customs Administration agreed to base their relationship on transparency, understanding and trust. Of course, the rights and obligations based on laws and regulations will continue to apply in full.

The starting points with regard to taxation and social security contributions are as follows:

• Compliance with laws and regulations: Enexis Groep acts in accordance with the applicable tax laws and regulations. In doing so, Enexis does not make use of unconventional tax structures.

• Transparency: How Enexis Groep operates is aimed at maintaining an open, constructive, and respectful relationship with all bodies involved in levying taxation and social security contributions.

Use is made of the following to achieve these objectives:

• clear assignment of taxation responsibilities within the organisational structure (tax governance);

• Up-to-date taxation process descriptions;

• Automation and technology for preparing correct and comprehensive tax returns;

• The Enexis Internal Control Framework, of which the functioning is assessed twice a year via a Control Self-Assessment (CSA), in which specific identified tax risks and the corresponding mitigating measures have been laid down;

• working relationship with the bodies involved in the levying of taxes and social security contributions that is based on trust, understanding, and transparency; and

• Internal and external communication about tax matters with the aim of having contact with employees (and representatives of employees) and other stakeholders about the impact of the levy of taxes and social security contributions on the organisation.

The Dutch Minimum Taxation Act 2024(Pillar II)

The Dutch Minimum Taxation Act 2024 came into force on 1 January 2024. The law will take effect as of the financial year starting 1 January 2024. An assessment was performed regarding the impact of this act. It follows from the assessment that:

• Enexis Holding N.V. and all of its subsidiaries, as a group within the Netherlands, fall within the scope of this act.

• The new act is not expected to lead to additional taxation as the effective tax rate in the sense of the act is higher than 15% or due to ‘actual presence’. If additional taxation should have to take place, then a reduction of additional taxation is included in the act for five years after the act first became applicable.

Tax groups

Enexis Holding N.V. forms a tax group for corporate income tax together with its subsidiaries. The companies that were members of the tax group at year-end 2023 are: Enexis Netbeheer B.V., Enexis Personeel B.V., Enexis Vastgoed B.V., Enpuls B.V. and Enpuls Projecten B.V. and Mijnwater Warmte Infra B.V. Within this group of companies, the corporate income tax that Enexis Holding N.V. owes the Dutch Tax and Customs Administration is apportioned among the companies included in the tax group based on realised commercial results taking into account the applicable exemptions and non-deductible amounts. In the event of changes in the composition of the tax group, deferred tax items are settled between Enexis Holding N.V. and the relevant group company or companies.

There is also a tax group for turnover tax (VAT), with the exception of Mijnwater Warmte Infra B.V. Companies are jointly and severally liable for the tax liabilities of the tax group over the period in which they belong to the tax group. The turnover tax payable by Enexis Holding N.V. to the Dutch Tax and Customs Administration is settled with the group companies in accordance with the turnover tax owed by each company.

Corporate income tax

The business activities of Enexis Groep are subject to corporate income tax. The tax on the result for the reporting period comprises current, offsetable, and deferred corporate income tax. The corporate income tax is included on the income statement, except when it relates to items recognised directly in equity.

The corporate income tax for 2024 amounted to €86 million (2023: €16 million).

The corporate income tax can be specified as follows:

The application of the arbitrary tax depreciation in 2023 resulted in a tax loss for 2023. The remainder of this 2023 tax loss – the 2023 tax loss less the offset against the 2022 tax result – is fully recoverable against the 2024 tax profit. Partly due to this netting, the income tax payable for the period is €50 million and the deferred tax asset changes by €42 million.

The corporate income tax was calculated as follows:

The permanent differences between the calculation of the commercial result and the result for tax purposes are primarily caused by the use of investment schemes for tax deductions for energy and environment investments. As a result of investment schemes, investing in sustainable and environmentally friendly assets provides a tax deduction of €17 million (2023: €18 million).

There were no uncertain tax liabilities arising from previous years as of year-end 2024. Final assessments have been imposed up to and including the fiscal year 2021.

The reconciliation of the statutory income tax rate with the reported income tax rate (€86 million), expressed as a percentage of profit before tax (€340 million), is as follows: