PSA - 2019 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2019 Notes to the Consolidated Financial Statements at 31 December 2019

OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES 13.6.

31 December 2019 31 December 2018 31 December 2017

(in million euros)

Financing commitments to customers

-

-

12

INCOME TAXES NOTE 14

In accordancewith IAS 12 - Income Taxes , deferred taxes are calculatedfor all temporarydifferencesbetweenthe tax base of assets and liabilities and their carrying amount. Deferred tax liabilitiesare systematicallyrecognised,while deferredtax assets are recognisedonly when there is a reasonableexpectationthat they will be recovered. A deferred tax liability is recognised for all taxable temporary differencesassociatedwith investmentsin subsidiariesand equity method investments for the variance between their tax and accountingvalue, exceptto the extentthat both of the following conditions are satisfied: the Group is able to control the timing of the reversal of the n temporarydifference; and it is probablethat the temporarydifferencewill not reverse n in the foreseeable future.

In practice: for subsidiaries fully consolidated,a deferred tax liability is n recognisedonly in respect of distributiontaxes on dividends that will be paid by the subsidiary in the following year by decisionof the Group; for equity method investments, a deferred tax liability on n dividenddistributionsis recognisedfor all differencesbetween the taxbase of theshares andtheir carrying amount; current tax benefits generated by intragroup provisions and n sales are not cancelledby recognisingdeferred tax liabilities, exceptwhen the differenceis consideredto be temporary,for example, when the Grouplans todivestthe subsidiary.

INCOME TAXES OF CONSOLIDATED COMPANIES 14.1.

2019

2018

2017

(in million euros)

Current taxes Corporate income taxes

(816)

(1,008)

(565)

Deferred taxes Deferred taxes arising in the year

100

393

(134) (699)

TOTAL

(716)

(615)

Current taxes A. Current taxes representthe amountspaid or currentlydue to the tax authoritiesfor the year, calculatedin accordancewith the tax regulations and ratesin effectin the variouscountries. In France,PeugeotS.A. and its Frenchsubsidiariesthat are at least 95%-ownedmaintainedtheir electionto determineFrench income taxes on a consolidatedbasis in accordancewith Article 223A of the FrenchTax Code. In addition,the Group applies optional national integrationor tax consolidationplans. When withholding taxes on managementfees are used by the recipientsto pay tax, incomeis recognisedappropriately in current taxes.

Tax rate in France B. The French statutory income tax rate is 34.43%, including the additionalcontribution. The cap on offsettingtax loss carryforwardsagainsttaxableprofit for theyear ismaintained at 50% in 2019. TheFinanceActsfor 2018and2020changedthe incometax rate in France: From 1 January 2022, the normal tax rate will be 25.83% (includingthe additional contribution). Deferred taxes C. Deferredtaxes are determinedas describedabove.Deferredtaxes were tested for impairmentlosses on the basis of tax estimates consistentwith the main assumptionsof the Group’sMedium-Term Plan,and recordedoverthe periodfor whichthe Groupdeemstheir recoverability likely. Tax loss carryforwards relatingto the Frenchtax groupavailablefor offsetting against net deferred tax liabilities (subject to the 50% cap) are recognised in the statementof financialposition.

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PSA - GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT