BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

NOTE 7

INCOME TAX

Accounting policies Income tax expense represents the sum of the tax currently payable and deferred tax. ●

The tax currently payable is based on taxable profit for the year. Taxable income differs from income as published in the income ● statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Liability for current tax is calculated using tax rates that have been enacted as of the balance sheet date. BIMA 83, BIC Écriture 2000, BIC Services, BIC Conté, Société Immobilière BIC Clichy, Société Immobilière Valiton Gesnouin, BIC ● Rasoirs, Société du Briquet Jetable 75, BIC Graphic France, BIC Assemblage, BIC Technologies, BIC International Développement, DAPE 74 Distribution, Stypen, Electro-Centre and BIC Éducation are part of the SOCIÉTÉ BIC tax group.

7-1

Income tax expense (1)

2,733 Deferred tax

4,248 Deferred tax

36,947 France

32,887 France

62,895 Foreign

51,103 Foreign

2017

2018

Income tax expense Total : 102,574

Income tax expense Total : 88,237

The normal income tax rate in France is 34.43% (including social contributions) for the fiscal year ended 2018 (unchanged from 2017). Taxation for other jurisdictions is calculated at the rates prevailing in the respective countries. The Group uses the French tax rate as the theoretical base for the reconciliation between the theoretical tax expense and the effective income tax expense. Thus one of the main elements of reconciliation is the effect of differences in tax rates. As of December 31, 2018, the main contributors were the U.S., United Kingdom, Spain and Mexico. (As of December 31, 2017, the main contributors were the U.S., Greece, Spain and Mexico).

As of December 31, 2018, Cello and Pimaco have been impaired respectively for an amount of 68.7 million euros and 5.5 million euros (see notes 5 et 10) and generated an increase in the Group effective tax rate (see initial recognition exemptions). As of December 31, 2017, the invalidation of the 3% additional French Corporate Income Tax on dividends amounted 24.5 million euros was included in the income tax. The related income interests amounting to 2.5 million euros were recorded in financial income (see note 6). The French exceptional contribution of 15% amounting to 6.6 million euros was also included in the income tax as of December 31, 2017.

Restated for IFRS 15 – Revenue from Contract with Customers. (1)

206

• BIC GROUP - 2018 REGISTRATION DOCUMENT •