- Home
- Financial statements
- Consolidated financial statements
- Notes to Financial Statements
- 19. Income taxes
19. Income taxes
The components of income tax expense for the years ended 31 December 2014 and 2013 were as follows:
2014 | 2013 | |
Current income tax expense | ||
Income tax for the year | (5,396) | (3,752) |
Adjustments of the current income tax for previous years | 31 | 101 |
Total current income tax for the year | (5,365) | (3,651) |
Deferred tax expense | ||
Origination and reversal of temporary differences | (3,062) | (5,988) |
Changes in unused tax losses | (1,520) | 1,651 |
Total deferred income tax | (4,582) | (4,337) |
Total income tax expense for the year | (9,947) | (7,988) |
A reconciliation of the theoretical tax charge to the actual income tax charge is as follows:
2014 | 2013 | |
Profit before tax | 47,754 | 32,119 |
Statutory income tax rate | 20% | 20% |
Theoretical tax charge at statutory income tax rate | (9,551) | (6,424) |
Adjustments of the current income tax for previous years | 31 | 101 |
Non-deductible expenses and non-taxable income | 916 | (2,299) |
Tax on intragroup dividend income | (123) | (379) |
Changes in unrecognized deferred tax assets | (1,087) | 1,013 |
Effect of tax rate change | (133) | - |
Total actual income tax | (9,947) | (7,988) |
Effective tax rate, % | 20,83% | 24,87% |
Effect of tax rate change include calculation of deferred tax assets and liabilities from associate as at December 31, 2014.
Non-deductible expenses and non-taxable income comprised the following amounts for the year ended 31 December 2014 and 2013:
2014 | 2013 | |
Effect of other employee benefits | 288 | 223 |
Effect of business combination achieved in several stages | (128) | - |
Reversal/ (accrual) of impairment loss | 260 | 72 |
Other | 496 | (2,594) |
Total non-deductible expenses and non-taxable income | 916 | (2,299) |
Other non-deductible expenses and non-taxable income include income connected with depreciation of certain property, plant and equipment, promotional and sponsorship expenditures, travel expenditures in excess of certain statutory allowances, other expenses and value added tax accrued on free-of-charge services.
The components of net deferred tax assets and liabilities as at 31 December 2014 and 2013, and the respective movements during 2014 and 2013 were as follows:
Movement during 2014 recognized in | |||||||
Balance as at 1 January 2014 | Disposal through business combinations | Equity | Other comprehensive income | Profit / or loss for the year | Reclassification to assets held for sale of mobile | Balance as at 31 December 2014 | |
Tax effects of future tax deductible items | |||||||
Property, plant and equipment | 9 | (35) | 1 | - | 137 | 25 | 137 |
Intangible assets | 74 | - | - | - | (65) | - | 9 |
Unused tax losses | 1,614 | (58) | - | - | (1,520) | (19) | 17 |
Trade and other accounts receivable | 39 | (4) | - | - | 56 | (31) | 60 |
Inventories | 807 | - | - | - | (518) | - | 289 |
Investments | 429 | - | - | - | 138 | - | 567 |
Employee benefits | 1,945 | - | - | (758) | (11) | - | 1,176 |
Accounts payable, provisions and accrued expenses | 4,451 | (2) | - | - | (325) | (124) | 4,000 |
Other | 474 | (9) | 3 | - | (12) | (1) | 455 |
Gross deferred tax asset | 9,842 | (108) | 4 | (758) | (2,120) | (150) | 6,710 |
Tax effects of future taxable items: | |||||||
Property, plant and equipment | (30,186) | 5 | - | - | (18) | 1,128 | (29,071) |
Intangible assets | (3,086) | 45 | - | - | (52) | 11 | (3,082) |
Investments | (635) | 9 | - | - | (3,135) | - | (3,761) |
Accounts payable, provisions and accrued expenses | (18) | - | - | - | (5) | - | (23) |
Trade and other accounts receivable | (1,907) | - | - | - | 734 | 4 | (1,169) |
Inventories | - | - | - | - | (7) | (7) | |
Loans and borrowings | (274) | - | - | - | 16 | - | (258) |
Other | (188) | - | (4) | - | 6 | - | (186) |
Gross deferred tax liability | (36,294) | 59 | (4) | - | (2,461) | 1,143 | (37,557) |
Net deferred tax liability | (26,452) | (49) | - | (758) | (4,581) | 993 | (30,847) |
Movement during 2013 recognized in | |||||||
Balance as at 1 January 2013 | Acquisition through business combinations | Equity | Other comprehensive income | Profit / or loss for the year | Reclassification to assets held for sale of mobile | Balance as at 31 December 2013 | |
Tax effects of future tax deductible items | |||||||
Property, plant and equipment | 464 | - | - | - | (5) | (450) | 9 |
Intangible assets | - | - | - | - | 74 | - | 74 |
Unused tax losses | 3,087 | - | - | - | 1,651 | (3,124) | 1,614 |
Trade and other accounts receivable | 169 | - | - | - | (124) | (6) | 39 |
Inventories | 227 | - | - | - | 624 | (44) | 807 |
Investments | 1,481 | - | - | - | (1,051) | (1) | 429 |
Employee benefits | 1,708 | - | - | (371) | 608 | - | 1,945 |
Loans and borrowings | 5 | - | - | - | - | (5) | - |
Other non-current liabilities | 110 | - | - | - | (110) | - | - |
Accounts payable, provisions and accrued expenses | 2,817 | - | - | - | 1,787 | (153) | 4,451 |
Other | 639 | - | 1 | - | 130 | (296) | 474 |
Gross deferred tax asset | 10,707 | - | 1 | (371) | 3,584 | (4,079) | 9,842 |
Tax effects of future taxable items: | |||||||
Property, plant and equipment | (22,888) | - | (1) | - | (8,151) | 854 | (30,186) |
Intangible assets | (5,158) | - | - | - | 265 | 1,807 | (3,086) |
Investments | (855) | - | - | - | 220 | - | (635) |
Accounts payable, provisions and accrued expenses | (152) | - | - | - | 106 | 28 | (18) |
Trade and other accounts receivable | (1,544) | - | - | - | (387) | 24 | (1,907) |
Loans and borrowings | (222) | - | - | - | (54) | 2 | (274) |
Other | (273) | - | (2) | - | 80 | 7 | (188) |
Gross deferred tax liability | (31,092) | - | (3) | - | (7,921) | 2,722 | (36,294) |
Net deferred tax liability | (20,385) | - | (2) | (371) | (4,337) | (1,357) | (26,452) |
In 2013 the Group recalculated income tax for prior periods related to the deductibility for tax purposes of accelerated tax depreciation of property, plant and equipment operated in an aggressive environment. As a result adjusted tax declarations were submitted to the tax authorities and income tax overprovided in prior periods was recognised. Accordingly the tax value of property, plant and equipment was decreased, which resulted in an increase of deferred tax liabilities.
Taxable temporary differences associated with investments in subsidiaries for which no deferred tax liabilities were recognized in the accompanying consolidated statements of financial position as at 31 December 2014 and 2013 amounted to 5,298 and 4,902 respectively. Deductible temporary differences associated with investments in subsidiaries for which no deferred tax assets were recognized in the accompanying consolidated statements of financial position as at 31 December 2014 and 2013 amounted to 6,205 and 2,759 respectively.
Deductible temporary differences for which no deferred tax assets were recognized in the accompanying consolidated statements of financial position as at 31 December 2014 and 2013 amounted to 1,133 and 1,836, respectively, of which unused tax losses with expiry date from 2014 to 2022 amounted to 156 and 157 for 2014 and 2013, respectively.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and the deferred income tax assets and deferred income tax liabilities relate to the income taxes levied by the same fiscal authority on the same taxable entity.
The consolidated statement of comprehensive income for 2014 and 2013 includes tax expense in respect of following items of other comprehensive income:
2014 | 2013 | |
Actuarial gains and losses | (758) | (371) |