PC3. Taxes

AP ACCOUNTING PRINCIPLES

Due to the links between accounting and taxation, the deferred tax liability on untaxed reserves in the Parent Company is recognized in the Parent Company’s annual accounts as a component of untaxed reserves.

Tax expense (+), tax income (-)

SEKm

2015

2014

Deferred tax

349

–70

Current tax

0

1

IS Total

349

–69

Explanation of tax expense

The difference between the recognized tax expense and expected tax expense is explained below. The expected tax expense is calculated based on profit before tax in each country multiplied by the current tax rate.

 

2015

2014

Reconciliation

SEKm

%

SEKm

%

IS Profit before tax

10,081

 

4,099

 

IS Tax expense/income

349

3.5

–69

–1.7

Expected tax

2,218

22.0

902

22.0

Difference

–1,869

–18.5

–971

–23.7

 

 

 

 

 

Difference is due to:

 

 

 

 

Taxes related to prior periods

14

0.2

–50

–1.2

Non-taxable dividends from subsidiaries

–2,351

–23.3

–1,364

–33.3

Non-taxable Group contributions from subsidiaries

–50

–0.5

–53

–1.3

Non-deductible Group contributions to subsidiaries

487

4.8

457

11.1

Assumed replacement reserves for land

35

0.9

Other non-taxable/non-deductible items

31

0.3

4

0.1

Total

–1,869

–18.5

–971

–23.7

The Parent Company participates in the Group’s tax pooling arrangement and pays the majority of the Group’s total Swedish taxes. These are now recognized in profit and loss as Group contributions paid and received.

Current tax liability (+), tax asset (–)

SEKm

2015

2014

Value, January 1

–18

–18

Current tax expense

0

1

Paid tax

–8

–1

BS Value, December 31

–26

–18

Deferred tax expense (+), tax income (–)

SEKm

2015

2014

Changes in temporary differences

335

–20

Adjustments for prior periods

14

–50

Total

349

–70

Provisions for taxes

SEKm

Value, January 1

Deferred tax expense

Value, December 31

Land and buildings

1,530

9

1,539

Provisions for pensions

–123

–21

–144

Tax loss carryforwards

–759

360

–399

Other

–39

1

–38

BS Total

609

349

958

Appropriations and untaxed reserves

Accumulated depreciation in excess of plan totaling SEK 230m (213) is included in the Parent Company’s untaxed reserves.