Contingent assets and liabilities

39. Current and deferred taxes

The €14,268 thousand increase is due to the adjustments of the regional tax on productive activities (IRAP) following the settlement of the dispute with the tax authorities for the 2010-2014 period, concerning the undue deduction - in the calculation of the IRAP tax - of grants related to income that RFI paid to Trenitalia for the free transport of Free Travel Card holders.

The following table provides a breakdown of the depreciable cost used for tax purposes which, following the application of the specific IFRS-compliant provisions set out in article 1.86 and 87 of Law no. 266/2005, is shown gross of the corresponding government grants related to assets to the railway infrastructure operator.

Depreciable cost under Italian Civil Code criteria Government grants related to assets up to 2019 Government grants related to assets for 2019 extraordinary maintenance Government grants related to assets up to 2060 Impairment loss as per IFRS, reducing the historical cost Total depreciable cost under tax criteria

Total fiscally-driven portion

(€’000)

2019

4,886,840 44,027,903

3,560,344

40,153,921 3,580,321 96,209,330 2,155,966

40. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities mainly relate to the disputes underway described in the Litigation and disputes section of the Directors’ report to which reference should be made for additional details.

The company’s main contingent assets and liabilities are reported below.

RFI - Gruppo COSIAC S.p.A.

In 2011, Gruppo COSIAC S.p.A. brought a legal action before the Rome Civil Court claiming compensation for damage (roughly €1.039 billion) following the alleged violation of rules of integrity, impartiality and good faith in the performance of the integrated service concession for the laying of double tracks on the Tommaso Natale –Carini railway line, and the connection to the Punta Raisi airport. With ruling no. 9769/2015, the Rome Court, admitting all RFI S.p.A.’s arguments and ordering COSIAC S.p.A. to pay all legal fees, declared that it did not have jurisdiction, while the administrative judge did, and denied all claims of liability (contractual, pre-contractual and non-contractual). COSIAC S.p.A. appealed against the ruling. With ruling no. 1.477 of 1 March 2019, the Rome Court of Appeal partially admitted COSIAC S.p.A.’s appeal and transferred the case to the Court, recognising the ordinary judge’s jurisdiction on the assumption that COSIAC S.p.A. claim in the case was an expression of its subjective right arising from a contract subject to private law. RFI S.p.A. appealed against this ruling before the Court of Cassation and requested its revocation before the Court of Appeal, as it was in contrast with the cases already pending in civil and administrative court, including with respect to jurisdiction. With summons notified on 3 May 2019, COSIAC S.p.A. reinstated the case before the Rome Civil Court: the preliminary hearing (originally scheduled for 20 September 2019) was set by the Court on 5 March 2020. RFI S.p.A. appeared

in court and requested a stay of the proceedings pending the decisions of the Court of Cassation and the Court of Appeal for revocation on the matters of jurisdiction and conflicting cases.

Council of State ruling no. 6108/2019 partially cancelling ART decision no. 70/2014

With ruling no. 6108 of 9 September 2019, the Council of State admitted RFI S.p.A.’s appeal against the Piedmont Regional Administrative Court’s ruling no. 541/2017 and cancelled the section of ART decision no. 70/2014 in which the provisions applicable to the fees to access the infrastructure - as they did not adequately consider the operator’s right to the full remuneration of the invested capital - prevented it from fully recovering the costs during the validity of the above decision. As part of the above ruling before the Council of State, RFI S.p.A. filed a document quantifying the amount not recovered for the period of validity of Decision no. 70/2014 (6 November 2014-31 December 2015) as €101 million or €140 million, depending on the calculation method used to determine the cost item of the return on invested capital. This ruling highlighted the retroactive nature of the cancellation of ART decision no. 70/2014 and required ART to “renew the [preliminary] proceedings for the period [...] from 6 November 2014 to 31 December 2015” in order to “fill the regulatory void caused by the aforementioned cancellation [...]” . ART took two separate legal actions against this ruling, which consisted of (i) an appeal for revocation to the Council of State, with an application for injunction, brought as an incidental action in the main proceedings brought by the railway company Italo Nuovo Trasporto Viaggiatori S.p.A. and (ii) a further independent appeal before the Supreme Court of Cassation. The proceedings are currently pending.