2.7 Income tax
Income tax expense charged to the income statement
|
CHF million |
2021 |
2020 |
|
Current income tax |
– 22 |
– 25 |
|
Deferred income tax |
50 |
68 |
|
Income tax |
28 |
43 |
Reconciliation
|
CHF million |
2021 |
2020 (adjusted) 1 |
|
Earnings before tax |
– 299 |
112 |
|
Expected income tax rate (Swiss average rate) |
16 % |
16 % |
|
Income tax at the expected income tax rate |
48 |
– 18 |
|
Tax effects from: |
|
|
|
Difference in tax rate of 16 % compared to locally expected income tax rates |
– 6 |
– 5 |
|
Income exempt from tax |
9 |
23 |
|
Non-deductible expenses for tax purposes |
– 27 |
– 28 |
|
Valuation from tax loss carryforwards |
1 |
11 |
|
Effect of changes in tax rates |
1 |
72 |
|
Previous years |
7 |
– 9 |
|
Other effects |
– 5 |
– 3 |
|
Total income tax expense |
28 |
43 |
|
Effective income tax rate |
9 % |
– 38 % |
1 See note 1.4
Change in deferred tax assets and liabilities
|
CHF million |
Deferred tax assets |
Deferred tax liabilities |
Net deferred tax liabilities |
|
Balance at 31 December 2019 |
99 |
426 |
327 |
|
Deferred taxes recognised in the income statement |
– 18 |
– 86 |
– 68 |
|
Deferred taxes recognised in other comprehensive income |
– 1 |
– 1 |
|
|
Acquisition / disposal of subsidiaries |
|
– 1 |
– 1 |
|
Currency translation differences |
– 1 |
|
1 |
|
Balance at 31 December 2020 |
79 |
338 |
259 |
|
Deferred taxes recognised in the income statement |
3 |
– 47 |
– 50 |
|
Deferred taxes recognised in other comprehensive income |
– 2 |
31 |
33 |
|
Acquisition / disposal of subsidiaries |
0 |
0 |
0 |
|
Currency translation differences |
– 3 |
– 1 |
2 |
|
Balance at 31 December 2021 |
77 |
321 |
244 |
Deferred tax assets and liabilities by origination of temporary differences
|
CHF million |
31 Dec 2021 |
31 Dec 2020 |
|
Tax losses and tax assets not yet used |
109 |
41 |
|
Property, plant and equipment |
30 |
29 |
|
Other non-current assets |
1 |
2 |
|
Current assets |
36 |
19 |
|
Provisions and liabilities |
29 |
26 |
|
Total gross deferred tax assets |
205 |
117 |
|
Property, plant and equipment |
124 |
127 |
|
Other non-current assets |
196 |
182 |
|
Current assets |
80 |
39 |
|
Provisions and liabilities |
49 |
28 |
|
Total gross deferred tax liabilities |
449 |
376 |
|
Net deferred tax liabilities |
244 |
259 |
|
Tax assets recognised in the balance sheet |
77 |
79 |
|
Tax liabilities recognised in the balance sheet |
321 |
338 |
At 31 December 2021, individual subsidiaries held tax loss carryforwards totalling CHF 1,024 million (previous year: CHF 782 million), which are available for offsetting against future taxable profits. Of this, the Alpiq Group has not recognised tax benefits on tax loss carryforwards of CHF 376 million (CHF 577 million) in the balance sheet item “Deferred tax assets”, as they are recognised for tax loss carryforwards only to the extent that realisation of the related tax benefit is probable. The average tax rate on tax loss carryforwards not eligible for capitalisation is 17 % (15 %). These tax loss carryforwards expire in the following periods:
|
CHF million |
31 Dec 2021 |
31 Dec 2020 |
|
Within 1 year |
0 |
59 |
|
Within 2 – 3 years |
35 |
45 |
|
After 3 years |
230 |
370 |
|
Unlimited use |
111 |
103 |
|
Total non-capitalisable tax loss carryforwards |
376 |
577 |
In addition, non-capitalised deductible temporary differences exist in an amount of CHF 227 million (CHF 91 million).
Assumptions are made based on local legal principles in calculating current income tax. Income taxes that are actually payable may deviate from the values originally calculated, as the definitive assessment is not finalised until years after the end of the reporting period in some cases. Furthermore, the definitive clarification of the taxation issue at the partner power plants in the canton of Grisons is still pending. The resulting risks are identified, assessed and recognised where necessary. Deferred tax assets are calculated in part using far-reaching estimates. The underlying forecasts pertain to a period of several years and comprise, among other things, a forecast of future taxable income as well as interpretations of the existing legal basis.
Accounting policies
Income tax expense represents the sum of current and deferred income tax. Current income tax is calculated on taxable earnings using the tax rates that have been enacted by the end of the reporting period. Deferred income tax is calculated using the tax rates enacted or substantively enacted at the reporting date.
Deferred taxes are recognised due to the differing recognition of certain income and expense items in the Group’s annual internal accounts and annual tax accounts. Deferred tax arising from temporary differences is calculated applying the balance sheet liability method. Deferred tax is not recognised for differences associated with investments in group companies, which will not reverse in the foreseeable future and where the timing of the reversal is controlled by the Group. Deferred tax assets are recognised when it is probable that they will be realised. Unrecognised tax loss carryforwards and unrecognised tax assets are disclosed.