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

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.

The Parent company participates in the Group’s tax pooling arrangement and as of 2021, pays the majority of the Group’s total Swedish taxes. These are recognized as Group contributions paid and received in profit or loss. The net of paid and received Group contributions per Group company amounts to 20.6% (21.4) and represents the respective Group company’s share of the Group’s total tax expense. The gross amounts are recognized as taxable income and deductible expenses and the repayable amounts are recognized as non-taxable income and non-deductible expenses.

Appropriations and untaxed reserves

Accumulated depreciation in excess of plan totaling SEK 6m (5) is included in the Parent company’s untaxed reserves.