PC4. Income taxes

AP Accounting principles

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

Tax expense (+), tax income (–)

SEKm

2019

2018

Deferred tax

–27

940

Current tax

0

IS Total

–27

940

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.

 

2019

 

2018

Reconciliation

SEKm

%

 

SEKm

%

1)

Non-taxable and non-deductible Group contributions relate to repayment from/to the Group company that pays the majority of the Group’s total Swedish taxes, which amount to 78.6% (78) of the Group contribution.

IS Profit before tax

4,095

 

 

17,102

 

IS Tax expense/income

–27

–0.7

 

940

5.5

Expected tax

876

21.4

 

3,763

22.0

Difference

–903

–22.1

 

–2,823

–16.5

 

 

 

 

 

 

The difference is due to:

 

 

 

 

 

Taxes related to prior periods

4

0.0

 

0

0.0

Non-taxable dividends from subsidiaries

–865

–21.1

 

–3,576

–20.9

Non-taxable Group contributions from Group companies1)

–174

–4.2

 

Non-deductible Group contributions from Group companies1)

 

713

4.2

Non-deductible interest expenses

129

3.1

 

Other non-taxable/non-deductible items

3

0.1

 

30

0.2

Changed tax rate

0

0.0

 

10

0.0

Total

–903

–22.1

 

–2,823

–16.5

The Parent Company participates in the Group’s tax pooling arrangement. Group contributions paid were treated as a tax deductible expense and received Group contributions were treated as non-taxable revenue. The net of paid and received Group contributions amounts to 21.4% (22) and is the amount of the company’s tax cost for the Group. In addition, the Parent Company has received Group contributions from another Swedish Group company, part of which was accounted for as non-taxable income.

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

SEKm

2019

2018

Value, January 1

–4

–4

Current tax expense

0

Paid tax

–7

0

BS Value, December 31

–11

–4

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

SEKm

2019

2018

Changes in temporary differences

–31

940

Adjustments for prior periods

4

0

Total

–27

940

Deferred tax assets (–)

SEKm

Value, January 1

Deferred tax expense

Value, December 31

Provisions for pensions

–179

0

–179

Tax loss carryforwards

–2

2

0

Other

76

–29

47

BS Total

–105

–27

–132

Appropriations and untaxed reserves

Accumulated depreciation in excess of plan totaling SEK 4m (1) is included in the Parent Company’s untaxed reserves.