Participation by country of taxes paid (Without recognized contributions)

Transcription

1 % 2014 Taxes paid In 2014, energy transmission companies from the ISA group contributed COP million in total taxes, of which COP million are recognized by the regulator. Participation by country of taxes paid, without including recognized contributions is as follows: Participation by country of taxes paid (Without recognized contributions) 70% 60% 50% 40% 30% 20% 10% 0% Bolivia Perú Brazil Colombia Series1 2% 15% 22% 61% 61% of total taxes correspond to Colombia, associated to the income and CREE tax, equity tax and Financial transaction tax. The second country in contribution is Brazil with 22% of income tax, social contribution on profitability and property tax; Peru accounts for 10% and Bolivia with 1% where the income tax is the most representative item.

2 2014 Taxes paid 2014 major taxes, energy transmission companies The chart 2014 Major Taxes, Energy Transmission Companies show the amounts that the ISA group companies engaged in energy transmission in Colombia, Brazil, Peru and Bolivia disclosed in their 2014 Financial Statements as expense for the period, and correspond to taxes, rates, contributions and contributions recognized by the regulator COLOMBIA (1) National Government Goverments, department and municipalities Sectorials contributions Regulation and control institutions Total taxes and contributions Impuesto de renta y CREE Impuesto al Patrimonio (2) Impuesto de Industria y comercio Gravamen Movimientos Financieros Impuesto de Alumbrado Público Impuesto predial Otros impuestos municipales (3) Subtotal Impuestos Contribución SSPD y CREG Estampillas Cuota de Fiscalización Controloría General República Subtotal Contribuciones Fondo Apoyo Electrificación Rural - FAER (4) Programa Normalización Redes Eléctricas - PRONE (4) Unidad de Planeación Minero Energética UPME (4) Subtotal Contribuciones Reconocidas Total Colombia

3 BRASIL (5) National Gobierno goverment Nacional Goverments, Gobiernos Sectorials Regulation and Entes de Total Total impuestos, taxes and department and Contribuciones Departamentales y contributions control regulación, tasas y municipalities Sectoriales institutions contributions municipales vigilancia y control contribuciones Impuesto de renta y contribución social IRPJ - CSLL Impuesto sobre la propiedad predial urbana - IPTU Impuesto sobre las Operaciones Financieras - IOF Subtotal Impuestos Tasa de Fiscalización ANNEL Subtotal contribuciones Contribución para financiamiento de la seguridad social- COFINS (6) Programa de Integración Social - PIS (6) Programa de incentivo a las Fuentas Alternativas de Energía - PROINFA (6) Investigación y Desarrollo - P&D (6) Cuenta de Desarrollo Energético - CDE (6) Reserva Global de Reversión - RGR (6) Subtotal Contribuciones Reconocidas Total Brasil PERU (7) National Gobierno goverment Nacional Gobiernos Goverments, Sectorials Entes Regulation de and Total Total impuestos, taxes and department and Contribuciones contributions control Departamentales y regulación, tasas y municipalities Sectoriales institutions contributions municipales vigilancia y control contribuciones Impuesto de renta Otros menores (8) Impuesto Predial Impuesto a las transacciones Financieras Subtotal Impuestos Contribución OSINERMING Dirección General de Electricidad Subtotal Contribuciones Total Perú

4 Notes: BOLIVIA (9) National Gobiernos Goverments, Sectorials Entes Regulation de and Total Gobierno Contribuciones Total impuestos, taxes and goverment department and Departamentales y contributions control regulación, tasas y Nacional municipalities Sectoriales institutions contributions municipales vigilancia y control contribuciones Impuesto Utilidades Empresas Impuesto transacciones Financieras Impuesto a la propiedad Subtotal Impuestos Tarifa dignidad Tasa Superintendencia de Electricidad Subtotal Contribuciones Total Bolivia TOTAL IMPUESTOS, TASAS, CONTRIBUCIONES (1) Information for Colombia includes taxes, rates and contributions of ISA, TRANSELCA and INTERCOLOMBIA (2) The equity tax paid by the companies in 2014 was not recognized in the Income Statement, but directly affected equity of each of them. (3) FAER, PRONE and UPME contributions were recognized by the regulator in the tariff. The UPME contribution is only in charge of ISA. (4) Other municipal taxes include: taxes on signs and boards, Fire Department surtax, vehicle tax and surtax for prevention and attention of disasters. (5) Information regarding Brazil includes taxes, rates and contributions of ISA Capital do Brasil, CTEEP, I.E. Minas Gerais, I.E. Evrecy, I.E. Serra do Japi, and I.E. Pinheiros. (6) Contributions recognized by the regulator in the tariff. PIS and COFINS of ISA Capital do Brasil is not subject to tariff recognition. (7) Information regarding Peru included taxes, rates and contributions of Red de Energía del Perú RPE, Consorcio Transmantaro CTM and ISA Perú. (8) Other taxes include: municipal taxes, vehicle tax, public registry tax, IGV tax, among others. (9) Information on taxes, rates and contributions of ISA Bolivia is included.

5 2014 Taxes paid Effective income tax rate The effective tax rate in 2014 for energy transmission companies was 34,65%. This rate was the result of establishing the ratio between the income tax and income before taxes corresponding to ISA in the consolidated statements, taking into account its stake at each company. FINANCIAL STATEMENTS CONSOLIDATED Proportion of consolidated corresponding to Minority ISA CONSOLIDATED INCOME BEFORE TAXES Taxes NET INCOME EFFECTIVE RATE 28,26% 15,54% 34,65%

6 2014 Taxes paid Expected Nominal rate of income Expected nominal rate of income tax for energy transmission companies from the ISA group is the result of multiplying the weight of each country s participation in the consolidated income before taxes of ISA and the income tax nominal rate established by the tax regulations of each country. The tariffs used to calculate the expected nominal tax rate are: Colombia 34% (Income 25% and CREE 9%) Brazil 34% (Income 25% and CSLL 9%) Peru 30% Bolivia 25% Taking the above into account, the expected income tax rate for energy transmission companies is 33,17%. Country Income taxes before Consolidated % Country Nominal rate Participation in rate by country Colombia % 34% 26,51% Brasil % 34% 1,58% Perú % 30% 4,37% Bolivia % 25% 0,70% Total Expected nominal rate 33,17%

7 2014 Taxes paid Income tax effective rate vs. nominal rate The effective rate for year 2014 was 34,6% vs. the expected nominal rate of 33,17%, explained by the following: In Colombia, the effective rate increases 34% given that in 2014 deferred taxes were adjusted from 33% to 34% in all companies by application of the tax reform enacted in December of the same year. However, the effective rate of ISA, on a standalone basis, was 32%, given that it has a legal stability agreement in place whereby it enjoys a benefit for investing on productive real fixed assets. In Brazil, ISA Capital, on a standalone basis, generated an accounting loss and a tax liquid income, which means a minor participation of this country in the consolidated income, without leading to a reduced tax expense. In Peru, the effective rate was below the nominal rate given that REP and ISA Perú signed a legal stability agreement with income rates of 27% and 22% respectively. In Bolivia, the higher rate is explained because the concession is amortized in accounting terms at 15 years, and in tax terms, at 30 years, thereby causing a higher tax payment. Country Income before tax 2014 Tax Expenditure 2014 Effective Rate Nominal rate country Colombia ,9% 34,0% Brazil ,7% 34,0% Peru ,6% 30,0% Bolivia ,6% 25,0% ,6% 33,17%

8 2014 Taxes paid Attachment definitions Colombia Income Tax: Companies domiciled in Colombia are taxed with the ordinary regime Income tax, on its income from worldwide sources. The tax base is determined taking into account the ordinary and extraordinary income minus revenues not constituting income and windfall income, by deducting costs, deductions, compensation and exempted income. Income tax for equity CREE: Law 1607 of 2012, created the new income tax for equity, which levies on income tax payer companies. Industry and Trade Tax: Municipal tax that levies the performance of industrial, commercial or service activity within a municipal jurisdiction. Regarding electricity transmission and connection activities, the tax is accrued in the municipality where the substation is located, on the average income earned in the municipality. Complementary Tax for signs and boards: This tax is a supplementary tax on industry and trade and is paid in those municipalities where the company has signs affecting the public space. Street lighting tax: The legal basis for that tax is Law 97 of 1913, Law 84 of 1915 and municipal agreements ruling such tax. The law did not define precisely the event giving rise to the obligation, or bases, or maximum rates. Tax on financial transactions: It is calculated on financial transactions at the rate of 4 per thousand in The rate of the tax on financial transactions will be four per thousand (4x1.000) until It provides a gradual reduction of this tax to 3 x 1000 in 2019, 2 x 1000 in 2020, 1 x 1000 in Unified property tax: The Unified Property Tax is a municipal tax that levies ownership or possession of urban and rural real estate located in the respective municipal jurisdictions, which directly affects properties. It is established based on the assessed valuation or self-appraisal of each property, it is subject to a rate provided by law. The tax base is determined by the assessed valuation and the rates range from 1 per thousand and 25.5 per thousand. Motor vehicle tax: Tax on the ownership or possession of vehicles; the tax base is constituted by the commercial value of the vehicles and the rates range between 1.5% and 3.5%. Contribution to the Energy and Gas Regulatory Commission -CREG: The Contribution to the ENERGY AND GAS REGULATORY COMMISSION - CREG, is settled on the basis of Article 85 of Law 142 of 1994, Decree 2461 of 1999 and resolutions issued annually by such entity for that purpose.

9 The maximum contribution rate is 1% of the operating expenses of the previous year; or such issued by the entity by resolution without exceeding the aforementioned rate. Contribution to the Superintendence of Home Utilities - SSPD: The Contribution to the Superintendence of Home Utilities, is settled on the basis of Article 85 of Law 142 of 1994 and the resolutions issued annually by such entity for that purpose. The maximum contribution rate is 1% of the operating expenses of the previous year; or such issued by the entity by resolution without exceeding the aforementioned rate. FAER contribution: Contribution created by Law 788 of 2002, determined by kilowatt / hour dispatched in the wholesale energy market and it is levied on the owners of the STN assets. It currently recognizes as income such costs incurred in the FAER contribution based on Article 63 of Law 812 of 2003 and CREG Resolution 068 of PRONE Contribution: The contribution to finance the Network Standardization Program, PRONE was created by Law 1151 of It is determined per kilowatt / hour dispatched in the wholesale energy market and it is in charge of the owners of the STN assets. It currently recognizes as income such costs incurred in the FAER contribution. Contribution to Comptroller General s Office: Auditing Fee for Comptroller General s Office -CGR- determined in Article 4 of Law 106 of 1993 and the resolutions issued by the entity. Its calculation takes into account the budget of operating expenses of the CGR, the percentage of public capital of the company and the execution of expenditure and investment of the company in the preceding year. UPME transfer: It is based in Article 14 of Law 143 of 1994, which provides that the budget of the Mining and Energy Planning Unit -UPME- must be borne in equal proportions by ECOPETROL, FEN, ECOCARBON and ISA. Fire Department Surtax: The Fire Department surtax is a municipal levy paid as an addition to any territorial taxes administered by municipalities to finance the Fire Department activity. Brazil IRPJ (Impuesto de renta personas Jurídicas) Income Tax on Corporate Entities: Federal tax imposed on income of corporate entities regarding its actual or presumed income. IRPJ on actual income: It applies on taxpayers whose total income last year was above R 78 million; financial institutions, whose revenues from yields or profits from abroad, those who enjoy tax benefits related to tax exemptions or reductions. The tax is determined based on actual results for each period, setting the taxable base on the basis of the accounting income and performing certain deductions as provided in the tax law. All income and capital gains are part of the basis for calculation, whichever denomination they have and regardless of their nature or kind. The net profit of the corresponding period is the sum of operating profit, operating income and holdings. IRPJ on presumed income: It is a form of simplified taxation for determining the calculation basis of IRPJ. It applies to corporate entities with gross income up to R 78 million in the previous year and that did not obtain any income from the items mentioned in the previous item for taxation on actual income. Under this system, the income of each taxpayer is determined by applying rates of 1.6%, 8%, 16% and 32% to the gross income; the application of the rate depends on the activity carried out by the taxpayer.

10 IRPJ Rate: The income tax rate on corporate entities is 15%, on net profit and a 10% surtax is established when taxable income exceeds R annually. CSLL (Contribución social sobre el lucro líquido) Social contribution on net profit: The same regulations on treatment and payment set for income tax of corporate entities, are applied in this case. CSLL actual income: The calculation basis for corporate entities choosing actual income is the accounting income adjusted by the additions and exclusions provided by law. CSLL presumed income: The calculation basis for corporate entities choosing presumed income corresponds to 12% of gross revenues from commercial, industrial, hospital and transport activities and 32% for the provision of services in general, except hospital and transport services; brokerage business, management, leasing or sale of real estate, movables and rights of any nature. CSLL Rate: The rate of the social contribution on income is 9%. PIS (Programa de Integración Social) Social Integration Program: A federal contribution based on Law 9,718 of November 1998 and Law 10,637 of The calculation basis is the total income earned by a corporate entity. Currently, there are two regimes, a cumulative regime with a rate of 0.65% where no credits can apply to the calculation basis and the non-cumulative calculation system with a rate of 1.65% and allows the reduction of the basis of calculation with certain credits. The cumulative regime (0.65%) was applied in general until 2001, and then the non-cumulative regime (1.65%) was implemented; however, there are a number of situations in which the cumulative regime should continue to apply, for example for people taxing on presumed or arbitrated income, corporate entities opting for SIMPLES, among others, should continue to be taxed by the cumulative system. COFINS (Contribución para el financiamiento de la seguridad social) Contribution for the financing of social security: It is a federal contribution based in Law 9718 of November, 1998 and of It provides the same conditions as to taxpayers, settlement base and systems (cumulative and noncumulative ) as the PIS. Rates are 3% for the cumulative system, and 7.6% for the non-cumulative system. ISS Tax on any kind of services: It is a municipal tax created by Complementary Law 116 of 2003; the taxpayer is the service provider, according to the list of services that are taxable under the Law. The rate is between 2% and 5%, and is established by each municipality. IOF Tax on Financial Transactions: The IOF levies credit, exchange and insurance operations and transactions relating to personal property securities, it is a federal tax. Taxpayers of the same are the parties involved in the transactions. The rates used can be fixed, variable, proportional, progressive or regressive. CCC Fuel Consumption Account: Created by Decree No of November 7, 1973; it is aimed at providing funds to subsidize power generation with power plants that use fossil fuels in isolated systems. The amount payable is fixed annually by ANEEL, according to the electric power consumed by consuming devices connected to transmission facilities. According to Article 23 of Law 12,783/2013, as from January 1, 2013 the CCC will be covered by the resources of the CDE. CDE Energy Development Account: Created by Law 10,438 of April 26, 2002, aims to provide a portion of the resources for energy development of the States, the competitiveness of energy produced from wind, thermal, natural gas, biomass, national coal and small hydro plants, in the areas served by the interconnected systems and promote universal electricity service throughout the national territory. It is in force until The amount payable is fixed annually by ANEEL, according to the electrical energy consumed by consumer units connected to the transmission facilities.

11 PROINFA Incentive Program for Alternative Electric Energy Sources: Created by law 10,438 of April 26, 2002, aims to provide resources to increase the participation of alternative renewable sources in electricity production in the country, such as wind power, biomass and small hydroelectric plants. It has an undetermined duration. The amount payable is fixed annually by ANEEL, based on the forecast of power generation by PROINFA member plants. RGR Global Reversion Reserve: Created by Decree No of February 26, 1957, is intended to provide resources for reversal, transfer, expansion and improvement of public electricity services. P&D Research and Development: Created by Law No of 24 July The concessionaires of public utilities for distribution, transmission or generation of electricity, the authorized power distribution companies and authorized entities for the independent production of electricity, excluding those that generate energy exclusively from wind, solar, biomass, qualified cogeneration of small hydropower facilities, must provide resources for research and development of the electricity sector. TFSEE Fiscalization Fee for Electricity utility: Created by Law 9,427 of December 26, 1996, it affects the generation, transmission, distribution and sale of electricity; it aims to provide ANEEL with funds to cover the cost of its activities. Peru Income tax - IR: Domiciled companies are levied with IR on its income from worldwide sources. The determination of annual profits and losses are based on the accounting records of the taxpayer, but in exceptional cases the law authorizes the Tax Authorities to use methods based on assumptions. In general, income and expenses are recorded according to the accrual principle. Rate: The current overall rate is 30%, but rates vary depending on the date on which the companies have entered into stability agreements; in the case of REP the rate is 27% and for ISA Peru, it is 22%. Property Tax: The property tax is an annual tax, collected by municipalities on land (real estate), either urban or rural. Taxpayers are the owners of the land by January 1 of the year in which the tax is due. Holders of concessions of public infrastructure and utilities granted by the State are subject to this tax regarding the lands granted under concession during the time of the contract (exception to this tax are those concessions of State forest lands used for forestry and wildlife and forest plantations). Financial transaction tax: Temporary tax created by Law levied on certain operations in national or foreign currency performed through the Financial System Institutions. It is a two-way tax, i.e. it levies both withdrawals and deposits. Bolivia IUE (Impuesto a las utilidades de las empresas) Tax on company profits: Tax on Company Profits (IUE) at the rate of 25% on taxable income for each year, which is the result of adjusting the accounting profit according to the criteria defined in the tax provisions. This tax settled and paid on an annual basis, is offset by the Transaction Tax (IT) generated in the following year, until exhausted or until the next expiration of the IUE. It is applied on income resulting from the financial statements of the companies at the end of each financial period, adjusted in accordance with tax legislation.

12 IT (Impuesto a las transacciones) Tax on transactions - Bolivia: The tax on transactions affects the performance in the country, of trade, industry, profession, occupation, business, rental of goods, works and services or any other activity - profitable or not - whatever is the nature of the subject providing the same. The Taxpayers of this tax are natural and legal persons, public and private companies and companies with or without corporate recognition, including sole proprietorships. The tax is determined on the basis of gross income accrued during the fiscal period by the exercise of taxable activity. The Tax on Transactions (IT) is used to offset the IUE accrued in the following year, until exhausted or until the next expiration of the IUE. Dignity rate - Bolivia: A rate to facilitate access and consumption of electricity to lower-income household families. This rate provides a 25% discount on electricity bills to those consumers whose monthly consumption is below 70 kwh in urban areas and 30 kwh in rural areas; to date, it remains in force within the electricity sector. Discounts regarding current fees are funded by the Electricity Companies operating in the MEM according to an agreement signed with the Government as of March 21, 2006 (Agreement on strategic alliance of the government of the Republic of Bolivia and companies from the Electricity Industry); the same was ratified as of March 11, Tax on financial transactions - Bolivia: The tax on financial transactions applies on credits and debits in checking and savings accounts, opened at institutions governed by the Law on Banks and Financial Institutions; payments or transfers of funds to an entity governed by the Law on Banks and Financial Institutions; the acquisition, at institutions governed by the Law on Banks and Financial Institutions, of certified checks, traveler's checks or other similar existing or to be created financial instruments; transfers or remittances, outside or inside the country, made through an institution governed by the Law on Banks and Financial Institutions and delivery or receipt of own or third parties funds that make up a payment system in the country or abroad.