BPCE - 2018 Registration document

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

DEFERRED TAX ASSETS AND LIABILITIES 11.2

Accounting principles Deferred tax assets and liabilities are recognized when temporary differences arise between the carrying amount of assets and liabilities on the balance sheet and their tax base, irrespective of when the tax is expected to be recovered or settled. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability settled based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax liabilities and assets are offset at the level of each tax entity. The tax entity may either be a single entity or a tax consolidation group. Deferred tax assets are recognized only to the extent that it is probable that the entity will be able to recover them in the foreseeable future.

Deferred tax assets and liabilities are recognized as tax income or expense in the income statement, except for those related to: revaluation differences on post-employment benefits; ● unrealized gains and losses on financial assets at fair value ● through other comprehensive income; changes in the fair value of derivatives designated as cash flow ● hedges; The corresponding deferred tax assets and liabilities are recognized as unrealized gains and losses directly in other comprehensive income. Deferred tax assets and liabilities are not discounted to their present value.

Deferred tax assets and liabilities on temporary differences arise from the recognition of the items listed in the statement below (positive figures indicate deferred tax assets, while negative figures in brackets represent deferred tax liabilities):

12/31/2018

01/01/2018

in millions of euros

Unrealized capital gains on UCITS

20

19

Fiscal EIGs

(87) 121

(113)

Provisions for employee-related liabilities Provisions for regulated home savings products Non-deductible impairment for credit risk

108

5

1

36

133 286

Other non-deductible provisions

364 (39)

Changes in fair value of financial instruments recorded in equity

25

Other sources of temporary differences* Deferred tax related to timing differences

(740) (324) 2,244

(554)

(96)

Deferred tax arising on the capitalization of tax loss carryforwards

2,331

Unrecognized deferred tax assets and liabilities NET DEFERRED TAX ASSETS AND LIABILITIES

(1,283)

(1,154)

637

1,081

Recognized As assets in the balance sheet As liabilities in the balance sheet

1,578 (941)

1,501

(420) A deferred tax liability of €336 million was recognized at December 31, 2018 (€311 million at December 31, 2017) on certain goodwill items recorded in the United States that will give rise to tax * amortization over 15 years.

The French Finance Act for 2018 led Groupe BPCE to revalue its net through to 2022 (including the social security contribution on deferred tax position: for French companies deferred taxes are profits), from 32.02% in 2019 to 25.83% in 2022 and thereafter for calculated by applying the tax rate that will be charged when the taxable profit taxed at the normal rate. temporary difference reverses. Tax rates will be gradually lowered

515

Registration document 2018