GRI 203-1, GRI 203-2, GRI 204-1, GRI 201-1
50Hertz and its subsidiaries are subject to tax. Taxes are used to finance measures and current expenses of regional administration bodies. The different regional administration bodies are then entitled to the revenue generated from the different types of taxes.
As an employer, 50Hertz pays the wage tax for its employees to the tax authorities. This wage tax is recognised under personnel expenses. The federal government primarily levies income and corporate income tax as well as VAT. Through a complicated fiscal equalisation scheme between the regional administration bodies, which is laid down in the financial constitution of German basic law, these taxes partly go indirectly to the regional administration bodies of federal states and communities in 50Hertz’s grid area. In 2018, 50Hertz paid EUR 40.9m (prior year: EUR 84.5m) in corporate income tax. Additionally, EUR 1,158.3m (prior year: EUR 1,095.4m) VAT and EUR 1,053.3m (prior year: EUR 941.9m) input VAT were incurred.
In addition to these federal taxes, the municipalities also levy real estate tax and trade tax. These taxes go directly to the municipalities. This means that this part of 50Hertz’s added value can be directly used in the municipalities of 50Hertz’s grid area via their households to finance their expenses. In the fiscal year, the 50Hertz Group paid EUR 0.4m (prior year: EUR 0.4m) in real estate tax and EUR 47.9 (prior year: 65.7m) in trade tax.
In its regulations adopted by management, 50Hertz has under takennot to adopt an “aggressive tax policy” and to pay its taxes on time and in accordance with the law. By making this voluntary commitment in the areas it can influence, 50Hertz has created a framework for sustainably distributing the added value generated. The main beneficiaries of this are structurally weak regions located in 50Hertz’s grid area.
In 2018, 50Hertz purchased goods and services totalling EUR 921m from companies headquartered in Germany. Of this amount, EUR 141m, or 15.3%, went to companies based in50Hertz’s grid area.
The lower percentage compared to 63% in 2017 is primarily due to awarding the contract for a submarine cable to connect the Ostwind 2 wind farm (Westlich Adlergrund cluster CWA 2) of EUR 542m to a syndicate based in Cologne. This and other orders will be called by the companies in subsequent years as goods delivered and services provided.