BPCE - 2019 Universal Registration Document

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF BPCE SA GROUP 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

(567)

(6)

Deferred tax assets and liabilities

(27)

(383) (389)

INCOME TAX

(594)

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

Fiscal year 2019

Fiscal year 2018

5

Tax rate

Tax rate

in millions of euros

in millions of euros

Net income attributable to equity holders of the parent

631

685

Change in the value of goodwill

84

16

Non-controlling interests

698

782

Share in net income of associates

(231)

(248)

Income taxes

594

389

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

1,775

1,624

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

(611)

(559)

(87)

(58)

3.6%

Effects of permanent differences (1)

(213)

(190)

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

Reduced rate of tax and tax-exempt activities

4

31

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

209

130

92

90

Other items (3)

7

166

INCOME TAX EXPENSE (INCOME) RECOGNIZED

(594)

(389)

EFFECTIVE TAX RATE (INCOME TAX EXPENSE DIVIDED BY TAXABLE INCOME) 24.00% Permanent differences include in particular the impacts of the French systemic risk tax and the contribution to the Single Resolution Fund, consisting of non-deductible expenses (1) (see Note 4.7), and the impact of the reintegration of the share of expenses on dividends. 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, amounting to €91 million, and the impact of the decrease in tax rates consecutive to the recent (3) Finance Acts (revaluation of deferred tax assets and liabilities at December 31, 2018 for -€14 million). In 2018, other items included provision write-backs for corporate tax refunds relating to non-consolidated entities which are no longer relevant (€57 million). 33.43%

469

UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE