2017 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements
a. Current tax The Group determines its current tax expense by applying the tax laws in force in countries where its subsidiaries and associates conduct their business and generate taxable revenues. The tax laws applied are those enacted or substantively enacted at the end of the reporting period. b. Deferred tax Deferred tax is recognised on all temporary differences between the tax base and the carrying amount of assets and liabilities on consolidation. Deferred tax assets are only recognised if it is probable that they will be recovered as a result of taxable profit expected in future periods over a reasonable time horizon.
They are reviewed at the end of each reporting period. Tax assets and liabilities are measured based on the tax rates enacted or substantively enacted applicable to the reporting period during which the asset will be realised or the liability settled. Their effect is recognised in profit or loss as Deferred tax unless it relates to items recorded under Other comprehensive income ; in the latter case, the effect is also included among gains and losses recognised directly in equity. Deferred tax assets and liabilities, regardless of their expiry date, are offset when: p the Group has the legal right to settle current tax amounts on a net basis; and p the deferred tax assets and liabilities relate to the same tax entity.
6.2. Reconciliation of theoretical and effective tax expense
(in millions of euros)
Adjustment for: p Net profit from associates
10.8 -80.9 225.9
p Tax expense
Profit before tax
Theoretical tax rate
Theoretical tax expense Reconciliation Permanent differences
Impact of uncapitalised losses for the year
Use/Capitalisation of previously uncapitalised loss carryforwards
Impact of tax credits Tax rate differences
Prior year tax adjustments
CVAE (net of tax) Tax reassessment
-9.6 -1.0 -0.9
Contribution on dividends paid
Actual tax expense Effective tax rate
The reconciliation between the theoretical tax charge and the effective tax charge is conducted using the tax rate for the current year in France for the Group’s parent company. The latter consists of the corporate tax rate of 33.33%, to which is added the contribution sociale de solidarité des sociétés of 1.1%, a corporate social solidarity contribution also known as the C3S. The cotisation sur la valeur ajoutée des entreprises or CVAE, a contribution based on the value added by the business, which is a component of the contribution économique territoriale or CET, the regional economic contribution in France, is recognised as part of the corporate income tax expense. The Group operates in many countries with differing tax legislation and taxation rates. Within each country, taxation rates may also vary depending on the tax policies implemented by local governments and can lead to differences between the current and deferred taxation
rates, as is the case mainly in France, the United Kingdom and Belgium. Local weighted average taxation rates applicable to Group companies can therefore vary from year to year depending on the relative level of taxable profit. These movements are reflected in Tax rate differences . Other tax mainly includes the impact in France of the claim filed to obtain tax relief by way of the refund of the 3% contribution on dividends paid in 2015, 2016 and 2017 for a total of €3.8 million, including €0.2 million in respect of interest on overdue payments. This item also reflects the exceptional surtax assessed on corporate income tax paid, approved in France for the 2017 financial year, which had a negative impact of €0.9 million. Other tax also includes unrecovered withholdings. Lastly, Tax reassessment reflects movements in provisions for taxes to cover tax risks in France, which had a positive impact on permanent differences and tax expense of €2.0 million.
SOPRA STERIA REGISTRATION DOCUMENT 2017
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