Breakdown of tax information

Tax contribution report

Properly explaining the importance of the Colonial Group's tax contribution is a priority for Colonial from the point of view of transparency and corporate social responsibility.

In this regard, Colonial publicly breaks down the main tax payments in those countries in which it operates, which reflects the importance given by Colonial to tax matters, as well as its level of commitment to the main stakeholders.

All this information can be accessed in the following document: Colonial Group tax contribution 2020.

Financial and non-financial tax information

Financial tax information

The breakdown of Colonial’s tax expense is detailed in the consolidated financial statements of Colonial and its subsidiaries and in the separate financial statements of Inmobiliaria Colonial, SOCIMI, S.A., specifically in Notes 19 and 17, respectively

Non-financial tax information

The breakdown of non-financial information can be found in section 2.2.2 of the Fiscal Transparency Report for fiscal year 2020.

Status of main tax inspections and litigation

Inspections

Periods open to review by the Tax Authorities

In Spain, at the close of 2020, Colonial has 2014, 2015 and subsequent financial years open for inspection for Corporation Tax. Colonial and its controlled subsidiaries have 2015 and subsequent years open to review, in general, for the other taxes that apply to them.

Inspections closed during 2020

In Spain, during 2020 an inspection process was closed regarding the tax on constructions, installations and works for the renovation works carried out in a property located in Madrid.

Inspections in 2021

In Spain, at the beginning of 2021, there were five inspection process open regarding the inspection of the tax on construction, installation and works of the renovation works of four buildings located in Madrid and for the construction of a building in Barcelona. Four processes have been completed without significant impact for Colonial.

An Inspection process regarding the cadastral registration for new construction of a building in Madrid has been open since 2020.

During 2021, an inspection process has been initiated by the City Council of Madrid on tax on constructions, installations and works for the renovation works carried out in a building.

Litigation

Most of Colonial's tax litigation processes arise from a process for returning undue income, where the relevant taxes are paid in a timely manner, and subsequently it asks for the amount paid to be refunded. Said refund request could be rejected by the Administration, in which case Colonial would challenge the refusal, thus starting court proceedings. By following this procedural strategy, Colonial avoids generating contingencies in its accounts without losing the legitimate interest to defend its position in the Courts.

The most relevant cases of litigation refer to the appeal against two additional settlements of the Transfer Tax and Stamp Duty arising from the purchase of property owing to disagreement concerning the value stated in the public deed and the value assigned by the Administration.

In addition, Colonial has several lawsuits regarding discrepancies in the cadastral values of certain properties located in Madrid and Barcelona.

Colonial has no reserves for tax litigation, nor does it expect potential significant impacts derived from open litigation.

Low tax territories

Colonial's policy is that investments are not made in or through territories classified as tax havens with the intention of reducing the tax burden. Furthermore, Colonial does not use entities based in tax havens in order to hide the true owner of income, activities, assets or rights.