Econocom - 2020 annual report

06 consolidated financial statements

notes to the consolidated financial statements

Income taxes 7.

Income tax expense for the year includes current taxes and deferred taxes. Current tax is (i) the estimated amount of tax due in respect of taxable profit for a given period, as determined using tax rates that have been enacted or substantively enacted at the end of the reporting period, (ii) any adjustments to the amount of current tax in previous periods, and (iii) any other tax calculated on a net amount of income andexpenses. Deferred taxes are accounted for using the liability method for all temporary differences between the book value recorded in the consolidated balance sheet and the tax bases of assets and liabilities, except for non-tax deductible goodwill.

Deferred taxes are determined based on the way in which the Group expects to recover or pay the book value of the assets and liabilities using the tax rates that have been enacted or substantially enacted at the reporting date. Deferred tax assets and liabilities are not discounted and are offset when they relate to the same tax entity. They are classified in the balance sheet as non-current assets and liabilities. Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against which deductible temporary differences or tax losses and tax credit carry forwards can be utilised.

7.1. Recognition of current and deferred taxes

Notes

2020 2019 restated*

in € millions

(15.2)

(19.6)

Current tax

0.4

1.1

Movements in tax provisions

16

(3.7)

(4.1)

Deferred tax

7.2

Total (22.6) In accordance with IFRS 5 (see 2.2.5), 2019 income and expenses of operations considered discontinued in 2020 * are reclassified to “Profit (loss) from discontinued operations” in the 2019 income statement. (18.5)

Effective tax rate

2020 2019 restated*

in € millions

67.9

82,6

Profit (loss) before tax on continuing operations

(18.5)

(22.6) 27.3%

Income tax on the profit of continuing operations

27.3% 20.4%

Effective tax rate as a percentage of profit (loss) before tax

Effective income tax rate on the restated profit 20.9% In accordance with IFRS 5 (see 2.2.5), 2019 income and expenses of operations considered discontinued in 2020 * are reclassified to “Profit (loss) from discontinued operations” in the 2019 income statement.

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2020 annual report