Airbus - Financial Statements 2022

2. Notes to the IFRS Consolidated Financial Statements Airbus Performance

The following table shows a reconciliation from the theoretical income tax (expense) using the Dutch corporate tax rate to the reported income tax (expense):

2022

2021

(In € million)

Profit before income taxes

5,075

5,027

Corporate income tax rate

25.8%

25.0%

Expected (expense) for income taxes

(1,309)

(1,257)

Effects from tax rate differentials / Change of tax rate

39

(103)

Capital gains and losses on disposals / mergers

0

5

Income from investment and associates

29

23

Tax credit

41

53

(1)

Change in valuation allowances

53

116

Tax contingencies

156

186

Other non ‑ deductible expenses and tax ‑ free income

52

124

Reported tax (expense)

(939)

(853)

(1) Reassessments of the recoverability of deferred tax assets based on future taxable profits.

The income tax expense amounts to €-939 million (2021: €-853 million) and corresponds to an effective income tax rate of 18.5%. This includes impacts on the tax ‑ free revaluation of certain equity investments under IFRS 9, tax risk updates and deferred tax asset impairments. In addition, the establishment of Airbus Aerostructures GmbH and the restructuring of Premium AEROTEC GmbH (see “ – Note 12: Segment Information”) led to a release of deferred tax asset impairment of €536 million out of which €336 million recorded in the income statement and €200 million in other comprehensive income. In 2021, the effective tax rate included positive impacts from tax risk updates, the tax ‑ free revaluation of certain equity investments under IFRS 9 and a net release of deferred tax asset impairments mainly due to an updated business outlook. As the Company controls the timing of the reversal of temporary differences associated with its subsidiaries (usually

referred to as “outside basis differences”) arising from yet undistributed profits and changes in foreign exchange rates, it does not recognise a deferred tax liability. For temporary differences arising from investments in associates the Company recognises deferred tax liabilities. The rate used reflects the assumptions that these differences will be recovered from dividend distribution unless a management resolution for the divestment of the investment exists at the closing date. For joint ventures, the Company assesses its ability to control the distribution of dividends based on existing shareholder agreements and recognises deferred tax liabilities accordingly. As of 31 December 2022, the aggregate amount of temporary differences associated with investments in subsidiaries, branches and associates and interests in joint arrangements, for which deferred tax liabilities have not been recognised, amounts to €172 million.

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