SCH2017_DRF_EN_Livre.indb

5 Consolidated financial statements at December 31, 2017 Notes to the consolidated financial statements

Other financial income and expense

NOTE 9

Full year 2017

Full year 2016

Exchange gains and losses, net

(24) (69)

(59) (74)

Financial component of defined benefit plan costs

Dividends received

2

5

Fair value adjustment of financial assets

(2)

(2)

Other financial expense, net

(55)

(60)

OTHER FINANCIAL INCOME AND EXPENSE

(148)

(190)

Income tax expense

NOTE 10

Whenever possible, Group entities file consolidated tax returns. Schneider Electric SE has chosen this option for the French subsidiaries it controls directly or indirectly through Schneider Electric Industries SAS.

10.1 – Analysis of income tax expense

Full year 2017

Full year 2016*

CURRENT TAXES France

(26)

(205) (387)

International

(655)

Total

(681)

(592)

DEFERRED TAXES France

10 71 81

30

International

(157) (127) (719)

Total

INCOME TAX (EXPENSE)/BENEFIT

(600)

* 2016 figures were restated for discontinued operations disclosed in note 1.

In 2017, the tax reforms in the USA and in Belgium, as well as the additional reform in France, led together to a positive adjustment in the P&L for EUR12 million. This impact represents the Group’s best estimate of those reforms on the deferred tax positions as at December 31,2017.

In 2016, the planned reduction of the Corporate Income Tax rate in France from 34.43% to 28.92% following the passing of the Finance Bill 2017 (“Loi de finances 2017”) leads to a negative adjustment of the P&L at the end of 2016 for EUR(119) million. This is to account for the adjustment downward of the net deferred tax assets corresponding mainly to past tax losses in France.

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