EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS Notes to the financial statements

Income taxes Note 15

15.1

Tax group

The breakdown is as follows: tax receivable of €435 million on the 2020 taxable loss (before exceptional items); tax charge of €(230) million on the exceptional result; tax receivable of €201 million corresponding to adjustments resulting from the tax consolidation.

Since 1 January 1988, EDF and certain subsidiaries have formed a group subject to the tax consolidation system existing under French tax legislation (Articles 223A to 223U of the French Tax Code). The tax consolidation group comprises 267 subsidiaries in 2020, including Enedis, EDF International, EDF Renewables and Dalkia.

15.3

Deferred taxes

15.2

Income tax payable

Deferred taxes are not recognised in EDF’s individual financial statements. Deferred taxes result from differences between the accounting bases and tax bases of items. They generally arise as a result of timing differences in the recognition of income and expenses: deferred tax assets reflect expenses which will be tax deductible in future years or losses carried forward which will reduce taxable income in the future; deferred tax liabilities reflect either advance tax deduction of future accounting expenses or accounting revenues that will be taxable in future years and will increase taxable income in the future. EDF SA, as head of the tax group, includes tax losses generated at Group level in its deferred tax positions. Changes in the basis for deferred taxes are as follows:

Under Article 223A of the French Tax Code, EDF, as the head of the tax consolidated group, is the sole entity responsible for payment of income taxes and additional related contributions. The tax consolidation agreement between the members of the tax group stipulates that the arrangement must be neutral in effect. In application of this principle, each subsidiary pays the consolidating company a contribution to group income tax equivalent to the tax it would have paid had it been taxed separately. The tax consolidation agreement between EDF and the subsidiaries included in the tax group requires EDF to reimburse loss-making subsidiaries for the tax saving generated by their losses, as and when the entities concerned make taxable profits, in compliance with the standard rules for use of taxable losses. The Company at the head of the tax group, EDF, recorded an income tax receivable of €406 million for 2020 (income tax receivable of €(605) million for 2019). 1. Timing differences generating a deferred tax asset Non-deductible provisions (1) ● Financial instruments and unrealised exchange gains ● Total deferred tax assets subject to the standard rate 2. Timing differences generating a deferred tax liability Financial instruments and unrealised exchange losses ● Other ● (in millions of euros)

31/12/2020

31/12/2019

Variation

(16,589) (4,717)

(14,704) (2,624)

(1,885) (2,093)

(529)

(595)

66

(21,835)

(17,923)

(3,912)

2,224 2,678 4,902

2,256 2,547 4,803

(32) 131

Other ●

Total deferred tax liabilities subject to the standard rate

99

-

-

-

Capital gains not yet taxed ●

(25) (25)

(15) (15)

(10) (10)

Provisions for losses taxable at 15% ●

Total deferred tax assets subject to the reduced rate

BASIS FOR DEFERRED TAXES Net future tax asset at standard rate (2) Net future tax asset at reduced rate

(16,958)

(13,135)

(3,823)

4,510

3,369

1,141

4 2 Mainly concerning post-employment benefits for personnel. In 2020 these provisions also include unrealised tax savings resulting from the future deductibility of (1) expenses whose deductibility is temporarily being questioned in ongoing tax litigations (see note 14). Applying a corporate income tax rate of 25.82% to long-term timing differences. (2) 2

450

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020