Note 10. Income tax

The Group’s recognized tax expense for the continuing operations for the year amounted to 4,645 million SEK (3,780) or 26% (22.2) of profit after financial items. The main part of the deferred tax expense is related to the temporary differences and the utilization of tax loss carryforwards in Sweden.

Reconciliation of the Group’s tax expense

The Group’s weighted average tax rate for the continuing operations, calculated in accordance with the statutory tax rates in each country, is 22.3% (22.4). The tax rate in Sweden is 22% (22). The tax loss carryforwards, net, is related to the revaluations in different countries whereof no stand-alone items are significant. Reconciliation of the Group’s weighted average tax rate, based on the tax rates in each country, and the Group’s actual tax expense:

The weighted average tax rate for Group total, based on the statutory tax rates in each country, is 23% (22.5). The higher loss for the discontinued operations this year results in a lower profit after financial items, which has a negative impact on the weighted average tax for Group total.

Reconciliation of the Parent Company’s tax expense

The Parent Company’s effective tax rate is higher than the nominal tax rate in Sweden, mainly due to the loss at sale of shares in Group companies which are non-deductable costs and adjustments of tax relating to prior years.

Reconciliation of the Parent Company’s nominal tax rate and actual tax expense:

Recognized in the balance sheet

Deferred tax assets and liabilities

The deferred tax assets and liabilities recognized in the balance sheet are attributable to the following assets and liabilities (liabilities shown with a minus sign).

Unrecognized deferred tax assets

The Group has additional tax loss carry-forward of 3,038 million SEK (1,663). The main part of the change for 2018 relates to revaluation and expiry of tax losses in prior years in China and Chile. No deferred tax asset was recognized for these losses.

The expiry dates of these tax loss carry-forwards are distributed as follows:

Related deferred tax assets were not recognized since utilization of the tax losses against future taxable profits is not deemed probable in the foreseeable future. The tax value of the unrecognized tax loss carry-forwards amounted to 826 million SEK (503).

In addition to the deferred tax assets and liabilities, Sandvik reports the following tax liabilities and receivables:

Provisions for taxes of –1,457 million SEK (–1,722) relate to ongoing disputes and assessed tax risks.