BPCE - 2019 Universal Registration Document

5

FINANCIAL REPORT

BPCE PARENT COMPANY ANNUAL FINANCIAL STATEMENTS

3.10

NON-RECURRING INCOME

Accounting principles This item only includes income and expenses before tax, which are generated or occur on an exceptional basis and are not related to the Group’s regular activities.

No non-recurring income was recorded in the 2019 fiscal year.

3.11

INCOME TAX

Accounting principles As of 2010, BPCE opted to apply the provisions of Article 91 of the amended French Finance Act for 2008 which extended the tax consolidation regime to networks of mutual banks. This option is modeled on the tax consolidation for mutual insurers and takes into account consolidation criteria not based on ownership interest (the scheme is usually available if at least 95% of the share capital of a subsidiary is owned by a parent company). As head of the Group, BPCE signed a tax consolidation agreement with members of its group (including the 14 Banques Populaires, the 15 Caisses d’Epargne, and BPCE subsidiaries, including BPCE International, Crédit Foncier, Banque Palatine and BPCE SFH). In accordance with the terms of this agreement, BPCE recognizes a receivable for the tax to be paid to it by the other members of the tax consolidation group along with a payable corresponding to the tax to be paid to the tax authorities on behalf of the consolidation group. The income tax expense for the period corresponds to the tax expense of BPCE in respect of 2019, corrected to reflect the impact of tax consolidation upon the Group.

INCOME TAX 3.11.1 Corporate tax for tax consolidation purposes can be broken down as follows:

Fiscal year 2019

in millions of euros

Taxable bases at the following rates:

33.33%

19%

15%

Tax on current income

2,395

2

Tax on non-recurring income

0

Taxable bases Applicable tax

2,395 (798)

0

2

+ 3.3% supplementary corporate tax

(26)

+ Extraordinary contributions

0

- Deductions in respect of tax credits

61

Reported income tax Tax consolidation effect

(763)

0

0

924

Adjustments to previous periods Impact of tax reassessments

10 (2)

Provisions for the return to profitability of subsidiaries

(22)

Provisions for taxes

(1)

TOTAL

146

0

0

In 2019, as a result of tax consolidation income, the gain in income tax after taking into account changes in provisions and other adjustments was €146 million, down €305 million relative to 2018. The difference was primarily due to the increase in the tax base. The 2019 fiscal year included income of €345 million on the

winding-up of the Natixis CIB exposures run-off-activity. Changes in assumptions in 2018 impacted the calculation of provisions for corporate tax refunds for subsidiaries in the tax consolidation scope, in the amount of €165 million.

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE

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