Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

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PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

INCOME TAX

NOTE 5

Accounting principles The Company has opted for the French tax regime for company groups. Under the terms of an agreement between the parent company and the subsidiaries included in the tax consolidation group, the French subsidiaries included in the tax consolidation scope recognise, in their financial statements, an income tax expense on the basis of their own tax results. Hermès International, the head of the tax

consolidation group, recognises the difference between the sum of the taxes of subsidiaries and the tax due on the overall income as a tax credit due to tax consolidation. The savings in corporate income tax and additional contributions resulting from the application of the group tax regime are in principle definitively acquired by Hermès International. The tax consolidation scope includes 61 companies.

5.1 Breakdown of income tax

2022

2021

In millions of euros

Net income before tax and employee profit‑sharing

2,586

1,184

Employee profit‑sharing

(7)

(6)

Net income before tax

2,579

1,178

Income tax

(50)

(13)

Tax (parent company only)

(80)

(41)

o/w tax on extraordinary income s o/w tax on other items s

(0)

1

(80)

(42)

Tax arising from tax consolidation

30

28

NET INCOME

2,529

1,165

Hermès International’s income tax expense only includes applicable exemptions under the terms of the parent‑subsidiary regime for income from investments in subsidiaries and affiliates. The tax credit resulting from the tax consolidation takes into account in particular the effect of the consolidation regime related to the loss‑making results of certain subsidiaries.

Hermès International recognised an income tax expense of €50 million in 2022, compared with a tax expense of €13 million in 2021. In addition, Hermès International is liable for payment of the tax of the fiscally consolidated group, which amounted to €453 million in 2022 compared with €347 million in 2021.

5.2 Increases or decreases in future tax liability As at 31December 2022, the future tax receivable was equal to €36 million, versus €47 million as at 31December 2021. This mainly consists of temporarily non‑deductible expenses, in particular retirement provisions.

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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