Iberdrola pays more than 7.5 billion in taxes worldwide in 2022
Iberdrola has to pay more than 7,500 million euros in taxes in 2022 worldwide; 2,600 million of which are related to taxes imposed in Spain due to the 4,339 million euros of profit achieved last year.
The company chaired by Ignacio Sánchez Galán will have to pay another 200 million euros corresponding to the special tax for banks and energy companies imposed by the Spanish government for companies with revenues of more than 1,000 million euros a year.
Iberdrola will have to assume a significant amount for these taxes and the chairman Ignacio Galán said that the electricity company will appeal the new tax as he considers that it goes against the Constitution and European law. According to the Iberdrola chairman, the new taxes approved by Pedro Sánchez's government are "arbitrary and discriminatory" because "they only affect some sectors that are not in comparable situations". An argument that was also defended by the company's head of Legal Services, Gerardo Codes, who added that 2024 will be key for this issue because that is when the appeal filed by the company for alleged violation of European law will probably be judicially answered. An appeal that Iberdrola "hopes to win" and which is filed on the basis that the tax "is calculated on income and not on extraordinary profits". "The government says it is going to charge for these extraordinary profits, but we have 19% less profit than the previous year and they apply it on sales; hence we defend the interests of our shareholders," explained Ignacio Galán.
The company's profit fell 19% in Spain "due to regulatory and tax measures and increased costs that the company has not passed on to customers", although this drop in business, also affected by the slowdown in business in Mexico, was offset by the success of the company's activity in the US and Brazilian markets.
On the other hand, Ignacio Galán advanced the company's objectives for 2023. It is expected to invest around 11 billion euros this year to, among other things, incorporate 3,000 MWh more in renewables and expand the regulated asset base. In addition to this, there will be more hydroelectric production than last year, as well as recovering part of the tariff deficit accumulated in the UK, as reported by OK Diario.
With these measures, plus a prudent rotation of assets aimed at strengthening its balance sheet, the company expects to increase its profit by between 8 and 10% (excluding the aforementioned tax of the Spanish government) on the 4,339 million euros of profit in 2022, despite anticipating an increase in its financial costs due to the effect of the rise in interest rates.
Iberdrola is characterised by its firm commitment to the implementation of renewable energies as opposed to fossil fuels. Iberdrola has increased investments by 13%, reaching 10,730 million euros. Renewable energies accounted for 46% of total investments. Clean energies are essential for the company, as Ignacio Sánchez Galán explained in his speech at the World Economic Forum in Davos to explain the measures to be taken immediately to stop depending on fossil fuels such as oil and gas and to achieve energy security based on clean energies.
Iberdrola presented the report "Electric, Together" at the Davos Forum, warning politicians, companies and others involved in the sector that energy transition issues must be resolved and carried out efficiently. Iberdrola will invest 47 billion between 2023 and 2025 to improve the energy system in the United States, Europe, the United Kingdom, Latin America and Asia-Pacific. In the case of Europe, Iberdrola stresses that European support for renewables is very important. The European Union has already allocated 40% of NextGenerationUE funds to the energy transition, although Ignacio Galán called for huge EU investments to decarbonise the environment and to reach energy self-sufficiency, thus making investments attractive.
