SOMFY - Annual financial report 2019

07 CONSOLIDATED FINANCIAL STATEMENTS

The CICE tax credit (abolished as of 1 January 2019) was recognised in 2018 as an IAS 20 operating grant as a deduction to employee expenses. The CIR tax credit is recognised as an IAS 20 operating grant in other operating income.

The analysis of the accounting treatment of SOPEM’s investment tax credit, carried out in accordance with the criteria set out above, led the Group to conclude that it falls within the scope of IAS 12. This tax credit was therefore recognised as a tax income. In order to avail of this tax credit, SOPEM has to comply with a number of commitments, such as a minimum investment value, a minimum number of people employed at the site and a deadline for completion of the investment (30 June 2020).

TAX PROOF NOTE 11.1

€ thousands

31/12/19 196,533

31/12/18 165,837

Profit before tax from continuing operations

Share of expenses on dividends

1,391

1,732

Goodwill impairment

710

421

Reclassification of CVAE to Income tax Reclassification of CICE to Employee expenses Reclassification of CIR to Other operating income

-4,132

-3,825 -2,382 -6,645

–

-6,639

Other

-248

988

Permanent differences

-8,918 -32,005 155,610 34.43% 53,576

-9,712 -32,530 123,594 34.43% 42,554

Net profit taxed at reduced rate Net profit taxable at standard rate

Tax rate in France

Tax charge recalculated at the French standard rate

Tax at reduced rate

3,306

5,042

Difference in standard rate in foreign countries

-22,333

-21,165

Tax losses for the year, unrecognised in previous periods, deficits used

330

3,042

Effect of the rate difference

-22,003 -1,919

-18,124 -3,678

Tax credits

Other taxes and miscellaneous

4,210

3,736

GROUP TAX

37,170 18.91%

29,530 17.81%

Effective rate

The results taxed at a reduced rate involve royalties, which were taxed at 10.33% (15.5% in 2018). The main countries that contributed to the difference in the tax rate were Tunisia (€11.7 million), the United States (€1.1 million), Germany (€0.9 million), other European countries (€7.8 million) and Middle Eastern countries (€0.6 million). Tax credits were primarily affected by the SOPEM tax credit (Poland): €1.6 million in 2019 compared with €2.6 million in 2018. Other taxes and miscellaneous items included, in particular, the French Corporate Value-Added Contribution (CVAE), which amounted to €4.1 million in 2019 and €3.8 million in 2018.

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SOMFY – ANNUAL FINANCIAL REPORT 2019