SOMFY // 2022 Annual Report

05 CONSOLIDATED FINANCIAL STATEMENTS

DEFERRED TAX Deferred tax assets and liabilities are measured at the income tax rate expected to apply to the financial year when the asset will be realised or the liability settled, on the basis of income tax rates (and tax regulations) adopted or virtually adopted at year-end. Deferred tax is recognised for the temporary differences between the book value of assets and liabilities and its tax value and restatements made on consolidation to conform to Group accounting standards (extended concept of deferred tax calculation). Deferred tax relating to tax losses of companies not included in the tax consolidation or that have arisen prior to their inclusion in the tax consolidation are recognised when the conditions defined by IAS 12 are met: – the entity has sufficient taxable temporary differences with a single tax authority and for the same entity, which will generate taxable amounts against which unused tax losses and tax credits can be offset before they expire; – it is likely that the entity will generate taxable profits before unused tax losses and tax credits expire; – unused tax losses result from identifiable causes, which will probably not reoccur; – opportunities related to the entity tax management will generate taxable profits for the financial year during which unused tax losses and tax credits can be allocated. If it is unlikely that the entity will make sufficient profits to allocate unused tax losses or tax credits, deferred tax assets are not recognised.

CVAE The CVAE tax charge is classified as income tax charge in order to provide more relevant information for comparison, given prevailing market practice. INVESTMENT TAX CREDIT The treatment of investment tax credits is not specifically addressed under IFRS. A number of criteria need to be assessed on a case-by-case basis to ascertain whether to recognise the investment tax credit as income tax (IAS 12) or as a grant (IAS 20). These criteria include the non-refundable nature or not of the tax credit should future taxable profits be sufficient, the specific nature or not of the investment, the taxable nature or not of the tax credit and the number of requirements for eligibility for the tax credit. 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 investments value, a minimum number of people employed at the site and a deadline for completion of the investments.

TAX PROOF NOTE 11.1

€ thousands

31/12/22 262,291 4,411 -2,676 -6,082 9,400 5,053 -41,385 225,959 25.83% 58,354

31/12/21 299,328

Profit before tax

Share of expenses on dividends

3,556 -2,771 -4,505 4,232

Reclassification of CVAE to Income tax

Reclassification of CIR to Other operating income

Other

Permanent differences

512

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

-40,639 259,201 28.41% 73,633

Tax rate in France

Tax charge recalculated at the French standard rate

Tax at reduced rate

4,275

4,198

Difference in standard rate in foreign countries

-14,284

-19,585

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

201

-766

Effect of the rate difference

-14,083 -6,450

-20,350 -4,546

Tax credits

Other taxes and miscellaneous

6,424

3,998

GROUP TAX

48,520 18.50%

56,932 19.02%

Effective rate

127

SOMFY – ANNUAL REPORT 2022