NWG // FINANCIAL INFORMATION // THE GROUP
Note 12 - Taxes
Accounting policies
The tax expense for the Group includes current tax and deferred tax . Current tax is tax payable or recoverable for the current year . This also includes adjustment for current tax attributable to prior periods . Current taxes are calculated on the basis of the tax regulations prevailing in the countries where the Group companies have operations . Current tax attributable to items recognized in equity and in other comprehensive income are also recognized in equity and other comprehensive income . Current tax assets and liabilities for current and previous periods are defined as the amount expected to receive from or pay to the tax authority in each country respectively .
Deferred tax is recognized in its entirety and calculated using the balance sheet method on all temporary differences arising between the tax value of assets and liabilities and their carrying amounts in the consolidated financial statements . Deferred tax liabilities are accounted for taxable temporary differences . Exempt are temporary differences for consolidated goodwill or when an asset or liability is recognized as part of a transaction which is not a business combination and which , at the time of the transaction , neither affects the reported profit or the taxable profit or loss .
Deferred tax assets are recognized for all deductible temporary differences , including loss carry-forwards to the extent that it is likely that future taxable profits will be available against which the temporary differences can be offset .
Deferred tax assets and liabilities are measured at the nominal amount and calculated by applying the tax rates and tax rules enacted or announced at the closing date . Current and deferred tax assets and liabilities are offset if there is a legal right to offset the amounts against each other and if they are attributable to the same tax authority .
Key estimates and assumptions
Estimates and assumptions are mainly made in relation to deferred tax assets , with respect to the probability that the loss carry-forwards will be utilized for settlement against future taxable profits . In the event that actual outcome differs from the estimates made or if management adjusts these estimates in future , the recorded value of deferred tax assets could change .
Tax expense SEK million |
2020 |
2019 |
Current tax |
-104.8 |
-103.9 |
Tax attributable to previous years |
-3.5 |
3.8 |
Total current tax expense |
-108.3 |
-100.1 |
Deferred tax relating to temporary differences and loss carry-forwards |
-9.7 |
3.4 |
Total recorded tax expense on result for the year |
-118.0 |
-96.7 |
The Group ' s tax expense for the year amounted to SEK 118.0 ( 96.7 ) million or 24.5 ( 20.7 )% on result before tax .
Reconciliation of effective tax Reconciliation between the Group ' s weighted average tax rate , based on each respective country ' s tax rate , and the Group ' s effective tax :
SEK million 2020 % 2019 %
Result before tax |
481.0 |
|
466.7 |
|
Tax expense based on respective country ' s tax rate |
-93.8 |
-19.5 |
-92.7 |
-19.9 |
Tax effects from : Non-taxable income |
6.8 |
1.4 |
4.5 |
1.0 |
Non-deductible expenses |
-5.8 |
-1.2 |
-4.3 |
-0.9 |
Tax arrears assessment |
-3.5 |
-0.7 |
3.8 |
0.8 |
Regional and other variations regarding tax rates |
-0.6 |
-0.1 |
-1.2 |
-0.3 |
Reversal of previously recognized loss carry-forwards |
-7.9 |
-1.6 |
-5.7 |
-1.2 |
Utilization of previously non-recognized loss carry-forwards |
3.8 |
0.8 |
6.8 |
1.5 |
Non-recognized loss carry-forwards |
-8.3 |
-1.7 |
-15.7 |
-3.4 |
Temporary differences |
-7.0 |
-1.5 |
2.8 |
0.6 |
Other |
-1.7 |
-0.4 |
5.0 |
1.1 |
Total recorded tax expense on result for the year |
-118.0 |
-24.5 |
-96.7 |
-20.7 |
088 // ANNUAL REPORT