BPCE - 2018 Registration document

5 FINANCIAL REPORT

IFRS Consolidated Financial Statements of BPCE SA group as at December 31, 2018

Note 11

Taxes

INCOME TAX 11.1

Accounting principles Income tax includes: current tax assets and liabilities calculated on the taxable income for the period of each fiscal entity in the tax consolidation scope by ●

applying the applicable tax rates and rules; deferred tax assets and liabilities (see 11.2). ●

Fiscal year 2018

Fiscal year 2017

in millions of euros

Current income tax expense Deferred tax assets and liabilities

(6)

286

(383) (389)

(897) (611)

INCOME TAX

Reconciliation between the tax charge in the financial statements and the theoretical tax charge

Fiscal year 2018

Fiscal year 2017

in millions of euros

in millions of euros

Tax rate

Tax rate

Net income attributable to equity holders of the parent

685

845

Change in the value of goodwill

16

66

Non-controlling interests

782

670

Share in net income of associates

(248)

(241)

Income taxes

389

611

INCOME BEFORE TAX AND CHANGES IN THE VALUE OF GOODWILL (A)

1,624

1,951

Standard income tax rate in France (B)

34.43%

34.43%

Theoretical income tax expense (income) at the tax rate applicable in France (AxB) Impact of the change in unrecognized deferred tax assets and liabilities

(559)

(672) (118) (142)

(58)

3.6%

6.0% 7.3% 0.6%

Effects of permanent differences (1)

(190)

11.7% (1.9%) (8.0%) (5.5%) (10.2%)

Reduced rate of tax and tax-exempt activities

31

(12)

Difference in tax rates on income taxed outside France Tax on prior periods, tax credits and other tax (2)

130

75

(3.8%)

90

203

(10.4%)

Other items (3)

166

55

(2.8%)

INCOME TAX EXPENSE (INCOME) RECOGNIZED EFFECTIVE TAX RATE (INCOME TAX EXPENSE DIVIDED BY TAXABLE INCOME)

(389)

(611)

24.00% 31.3% Permanent differences primarily consist of capital gains taxed under the long-term scheme and the impact of the TSB (French systemic banking risk tax) and the contribution to the SRF (single (1) resolution fund), which are non-deductible expenses (see Note 4.7). Tax on prior periods, tax credits and other tax mainly included tax credits and the impact of tax audits and the resolution of ongoing disputes. In 2017, these items included €117 million arising from (2) the reimbursement of the 3% tax on dividend payouts. Other items primarily include provision write-backs for corporate tax refunds relating to non-consolidated entities and that are no longer applicable (€57 million). In 2017, other items included the (3) effects of the extraordinary additional corporate tax charge introduced by the amended Finance Act for 2017, for -€51 million, and the impact of the reduction in the corporate tax rate introduced by the French Finance Act for 2018, for +€15 million.

514

Registration document 2018