50Hertz and its subsidiaries are evidently subject to tax. Taxes are used to finance measures and current expenses of regional administration bodies. The various regional administration bodies are then entitled to the revenue generated from the different tax brackets. As an employer, 50Hertz pays the wage tax for its employees directly to the tax authorities. This wage tax is recorded under personnel expenses. The federal government primarily imposes income and corporate income tax as well as VAT. Through a complicated financial equalisation scheme between the regional administration bodies, which is laid out in the financial constitution of German basic law, these taxes partially go indirectly to the regional administration bodies of federal states and communities in 50Hertz’s grid area. In 2019, 50Hertz paid out EUR 64.7m (prior year: EUR 40.9m) in corporate income tax. Additionally, EUR 1,050.9m (prior year: EUR 1,158.3m) VAT and EUR 1,029.9m (prior year: EUR 1,053.0m) input VAT were incurred. There were no legal disputes on tax issues in the year under review.
In addition to these federal taxes, the municipalities also levy real estate tax and trade tax. These taxes go directly to the municipalities. In layman’s terms, 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. During the financial year, the 50Hertz paid EUR 0.4m (prior year: EUR0.4m) in real estate tax and EUR 60.8 (prior year: 47.9m) in trade tax. In its regulations adopted by management, 50Hertz has implemented a non-agressive 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 predominantly weaker regions, located in 50Hertz’s grid area.
In 2019, 50Hertz secured goods and services totalling EUR 707.5m from companies headquartered in Germany. Out of this amount, EUR 346.9m went to companies based in 50Hertz’s grid area. This is equivalent to a share of around 49 percent.