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

2016

2015

Deferred tax

345

349

Current tax

0

0

IS Total

345

349

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 multiplied by the current tax rate.

 

2016

2015

1)

Non-taxable and non-deductible group contributions relate to the repayment from/to respective subsidiary which amounts to 78% of the group contributions.

Reconciliation

SEKm

%

SEKm

%

IS Profit before tax

42,890

 

10,081

 

IS Tax expense/income

345

0.8

349

3.5

Expected tax

9,436

22.0

2,218

22.0

Difference

–9,091

–21.2

–1,869

–18.5

 

 

 

 

 

The difference is due to:

 

 

 

 

Taxes related to prior periods

0

0.0

14

0.2

Non-taxable dividends from subsidiaries

–9,597

–22.4

–2,351

–23.3

Non-taxable Group contributions from subsidiaries 1)

–49

–0.1

–50

–0.5

Non-deductible Group contributions to subsidiaries 1)

394

0.9

487

4.8

Other non-taxable/non-deductible items

161

0.4

31

0.3

Total

–9,091

–21.2

–1,869

–18.5

The Parent Company participates in the Group’s tax pooling arrangement and pays the majority of the Group’s total Swedish taxes. These are recognized in profit and loss as Group contributions paid and received. The net of given and received group contribution per subsidiary amount to 22% and is the respective subsidiary’s share of the tax cost for the Group.

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

SEKm

2016

2015

Value, January 1

–26

–18

Current tax expense

0

0

Paid tax

0

–8

BS Value, December 31

–26

–26

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

SEKm

2016

2015

Changes in temporary differences

345

335

Adjustments for prior periods

0

14

Total

345

349

Provisions for taxes

SEKm

Value, January 1

Deferred tax expense

Value, December 31

Land and buildings

1,539

–3

1,536

Provisions for pensions

–144

149

5

Tax loss carryforwards

–399

205

–194

Other

–38

–6

–44

BS Total

958

345

1,303

Appropriations and untaxed reserves

Accumulated depreciation in excess of plan totaling SEK 242m (230) is included in the Parent Company’s untaxed reserves.