BPCE - 2019 Universal Registration Document

5

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF GROUPE BPCE AS AT DECEMBER 31, 2019

Income taxes

Note 11

11.1

INCOME TAX

Accounting principles Income tax includes all domestic and foreign taxes payable on the basis of taxable profits. Income tax also includes taxes, such as withholding taxes, which are payable by a subsidiary, an associate or a joint arrangement on distributions of dividends to the entity that draws up financial statements. The CVAE (Business Added Value Tax) is not considered an income tax. Income tax includes: current taxes, which are the amount of income taxes payable on taxable profit or recoverable on a tax loss over a given period. • They are calculated on the taxable income for the period for each fiscal entity in the tax consolidation scope by applying the applicable tax rates and rules set by the tax authorities and on the basis of which tax shall be paid (recovered); deferred taxes (see 11.2). • Where it is probable that one of the Group’s tax positions will not be accepted by the tax authorities, this situation is reflected in the financial statements when calculating current tax (due or recoverable) and deferred tax (asset or liability).

Fiscal year 2019

Fiscal year 2018

in millions of euros

Current income tax expense

(1,727)

(870) (607)

Deferred tax assets and liabilities

(75)

INCOME TAX

(1,801)

(1,477)

RECONCILIATION BETWEEN THE TAX CHARGE IN THE FINANCIAL STATEMENTS AND THE THEORETICAL TAX CHARGE

Fiscal year 2019

Fiscal year 2018

Tax rate

Tax rate

in millions of euros

in millions of euros

Net income attributable to equity holders of the parent

3,030

3,026

Change in the value of goodwill

84

16

Non-controlling interests

707

793

Share in net income of associates

(265) 1,801 5,356

(284) 1,477 5,029

Income taxes

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

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

(1,844)

(1,732)

(81)

(59)

1.2% 5.0%

(304)

(249)

Effects of permanent differences (1)

Reduced rate of tax and tax-exempt activities

36

97

(1.9%) (2.6%) (3.5%) (3.2%)

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

212

131 175 159

97 84

Other items (3)

INCOME TAX EXPENSE (INCOME) RECOGNIZED

(1,801)

(1,477)

EFFECTIVE TAX RATE (INCOME TAX EXPENSE DIVIDED BY TAXABLE INCOME) 29.40% Permanent differences primarily comprise the share of costs and expenses on dividends received and the impacts of the systemic bank tax and the SRF (Single Resolution Fund) (1) contribution, 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. (2) Other items mainly include the impacts of the tax consolidation of Groupe BPCE and the impact of the decrease in tax rates consecutive to the recent Finance Acts (revaluation of (3) existing items at December 31, 2018). 33.63%

324

UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE

www.groupebpce.com