10. Income tax
|
(in millions of euros) |
2023 |
2022 |
|
Reconciliation with effective tax rate |
||
|
Profit before tax from continuing operations |
-497 |
564 |
|
Income tax based on Dutch corporate income tax rate (25.8%) |
128 |
-146 |
|
Impact of rate differences for foreign entities |
7 |
- |
|
Addition of mixed costs, investment tax credit, etc. |
5 |
-1 |
|
Change in valuation of deferred tax assets |
-9 |
74 |
|
Unrecognised deferred claims for loss compensation in Germany |
-41 |
- |
|
Permanent difference: Untaxed results of restructuring and settlement in Germany |
17 |
39 |
|
Other effects |
- |
-3 |
|
Total income tax |
107 |
-37 |
Corporation tax is calculated based on the applicable tax rates in the Netherlands and Germany, taking into account the tax rules that give rise to permanent differences between the determination of the profit for commercial purposes and the determination for tax purposes. The tax provisions include the participation exemption and the limitation of deductible expenses.
The effective tax rate for profit before corporation tax was 22% (2022: 7%).
For the Dutch fiscal entity, there is agreement with the tax authorities on the tax returns up to and including 2021. A final assessment has been received for 2021, but not yet for the subsequent years. In the financial statements for this year and previous years, tax is recognised on the basis of the tax returns submitted up to and including 2022, the underlying principles adopted in those tax returns and any adjustments to previous years.
Accounting policy
Tax on the profit or loss for the financial year comprises the income tax that is payable or can be offset in the reporting period and deferred taxation. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity through other comprehensive income, in which case it is recognised in equity through other comprehensive income. All tax items are stated at nominal value.
The tax to be paid or offset for the financial year is the expected tax charge on taxable profit for the financial year, calculated using the tax rates prevailing on the balance sheet date, plus adjustments to tax payable for prior years.
Almost all subsidiaries belonging to the Group are included in the NS fiscal unity for corporate income tax purposes, with the exception of foreign group companies.