Groupe Renault - 2019 Universal Registration Document

RENAULT: A RESPONSIBLE COMPANY

ANNUAL GENERAL MEETING OF RENAULT ON APRIL 24, 2020

FINANCIAL STATEMENTS

GROUPE RENAULT

CORPORATE GOVERNANCE

RENAULT AND ITS SHAREHOLDERS

ADDITIONAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

CURRENT AND DEFERRED TAXES NOTE 8 As Renault SA elected to determine French income taxes under the domestic tax consolidation regime when it was formed, this is the regime applicable to the Group in which Renault SA is taxed in France. The Groupe Renault also applies other optional tax consolidation systems in Germany, Italy, Spain, Romania and the UK. Current and deferred taxes 8 – A –

2019 (626) (828)

2018

(€ million)

Current income taxes

(690)

Deferred tax income (charge) CURRENT AND DEFERRED TAXES

(33)

(1,454)

(723)

04

The current income tax charge for entities included in the French tax consolidation group amount to €117 million in 2019 (€90 million in 2018).The increase in the current income tax charge between 2018 and 2019 is notably due to the higher level of provisions for tax risks. In 2019, €509 million of the current income tax charge comes from foreign entities including AVTOVAZ (€600 million in 2018). This charge decreased in 2019, largely due to the lower taxable income in certain subsidiaries, and tax reassessments recognized in 2018.

The deferred tax charge for 2019 reflects the fact that recognition of deferred tax assets on tax loss carryforwards under the French tax consolidation system has been discontinued (with an effect of €(753) million), mainly as there were no prospects of taxable income for the tax consolidation group on the horizon of the Drive the Future plan. The plan’s assumptions are currently being revised to reflect the unfavourable market conditions.

Breakdown of the tax charge 8 – B –

2019 1,663

2018 2,634

(€ million)

Income before taxes and share in net income of associates and joint-ventures

Statutory income tax rate in France Theoretical tax income (charge)

34.43%

34.43%

(573)

(907)

Effect of differences between local tax rates and the French rate  (1)

194

249

Tax credits

78

33

Distribution taxes

(56)

(86)

Change in unrecognized deferred tax assets  (2)

(1,012)

73

Other impacts  (3)

8

-

Current and deferred tax income (charge) excluding taxes based on interim taxable profits

(1,361)

(638)

Taxes based on interim taxable profits  (4) Current and deferred tax income (charge)

(93)

(85)

(1,454)

(723)

The main contributors to the tax rate differential are Korea, Spain, Morocco, Romania, Switzerland, Turkey and the United Kingdom. (1) The deferred tax charge for 2019 includes the effect of discontinued recognition of deferred tax assets on tax loss carryforwards related to entities included in the French (2) tax consolidation group (see note 8-A). Other impacts mainly include the effect of permanent differences, reduced-rate taxations, tax reassessments, specific tax regimes, prior year adjustments and changes in (3) future year tax rates adopted before the end of the period. The Group’s main taxes based on taxable profits are the CVAE in France and the IRAP in Italy. (4)

French tax consolidation group For the French tax consolidation group, the current tax charge amounts to €(117) million, principally consisting of the business tax Cotisation sur la valeur ajoutée des entreprises (CVAE), and the deferred tax charge amounts to €(950) million, principally due to discontinuation of recognition of deferred tax assets on tax loss carryforwards (see note 8-A).

Entities not in the French tax consolidation group The effective tax rate across all foreign entities including AVTOVAZ is 19.4% in 2019 (28.7% in 2018).

369

GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019