Euronext - 2020 Universal Registration Document

Financial Statements 8 Notes to the Consolidated Financial Statements

NOTE 15 INCOME TAX EXPENSE

2020

2019

In thousands of euros

Current tax expense

(126,073)

(106,513)

Deferred tax expense

3,916

6,219

(100,294)

TOTAL

(122,157)

The actual tax charge incurred on the Group’s profit before income tax differs from the theoretical amount that would arise using the weighted average tax rates applicable to profit before income tax of the consolidated entities as follows:

RECONCILIATION OF EFFECTIVE TAX CHARGE

2020

2019

In thousands of euros

Profit before income tax

442,704

325,572

Income tax calculated at domestic tax rates applicable to profits in the respective countries

(118,302)

(92,492)

Tax effects of: Non-deductible expenses (a)

(3,021)

(8,847)

1,135

205

Other tax exempt income (b)

–

275

Over provided in prior years (c)

Other(d)

(1,969)

565

TOTAL (100,294) (a) In 2020, non-deductible expenses mainly relate to non-deductible M&A expenses. In 2019, non-deductible expenses mainly relate to non-deductible M&A expenses and increased redemption liability. (b) In 2020, other tax exempt income mainly relates to dividends and sales proceeds from investments. (c) In 2020, “over provided in prior years” and under provided were balanced. (d) As from 2014, the Company applies the statutory tax rates without (temporary) surcharges (in Portugal and France) to the profit before income tax to calculate tax at domestic rates. The (temporary) surcharges (-€2.9 million) have been included in the line “Other” Furthermore the line Other includes the impacts of statutory tax rate changes on deferred tax positions (-€.9 million) and an R&D tax credit of €1.7 million. (122,157)

The Netherlands and France have changed their future tax rates (see Note 19). The recalculation of deferred tax resulting from these changes had a negative impact of €2.3 million, which is included in the line “Other”.

The effective tax rate decreased from 30.8% for the year ended 31 December 2019 to 27.6% for the year ended 31 December 2020. These rates are practically in line with the normalized tax rate.

252

2020 UNIVERSAL REGISTRATION DOCUMENT