BPCE - 2020 Universal Registration Document

FINANCIAL REPORT

BPCE PARENT COMPANY ANNUAL FINANCIAL STATEMENTS

INCOME TAX

3.11

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 accordancewith 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 2020, corrected to reflect the impact of tax consolidation upon the Group.

INCOME TAX FOR 2020 3.11.1 Income tax breaks down as follows:

Fiscal year 2020

in millions of euros

31%

19%

15%

Taxable bases at the following rates:

Tax on current income

2,507

2

Tax on non-recurring income

0

Taxable bases Applicable tax

2,507 (777)

0

2

+ 3.3% supplementary corporate tax

(26)

+ Extraordinary contributions

0

- Deductions in respect of tax credits

53

5

Reported income tax Tax consolidation effect

(750) 1,015

0

0

Adjustments to previous periods Impact of tax reassessments

2 1

Provisions for the return to profitability of subsidiaries

(80)

Provisions for taxes

79

TOTAL

267

0

0

In 2020, as a result of tax consolidation income, the gain in income tax after taking into account changes in provisions and other adjustments was €267 million, up €121 million relative to 2019.

The change is mainly due to the contribution of a larger deficit by BPCE SA and BPCE International, the reversal of the provision covering the GIE Musica Lease ended early, and the recording as tax income of a tax loss claim concerning foreign tax credits following changes in case law.

543

UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE