P8 Income tax
Recognized in profit and loss
Income tax expense for the year |
2019 |
2020 |
|---|---|---|
Current tax |
–1,326 |
–624 |
Adjustment of taxes attributable to prior years |
–87 |
–57 |
Total current tax expense |
–1,413 |
–681 |
Deferred taxes relating to temporary differences and tax losses carried forward |
729 |
1 |
Total tax expense |
–684 |
–680 |
Reconciliation of the Parent Company’s tax expense
The Parent Company’s effective tax rate is lower than the nominal tax rate in Sweden, mainly due to received dividends from shares in group companies which are non-taxable incomes.
Reconciliation of the Parent Company’s nominal tax rate and actual tax expense:
|
2019 |
2020 |
||
|---|---|---|---|---|
|
MSEK |
% |
MSEK |
% |
Profit after finanical items |
15,821 |
|
3,547 |
|
Weighted average tax based on each country’s tax rate |
–3,386 |
–21.4 |
–759 |
–21.4 |
|
|
|
|
|
Tax effect of |
|
|
|
|
Non-deductible expenses |
–68 |
–0.4 |
–51 |
–1.4 |
Tax-exempt income |
2,797 |
17.7 |
178 |
5.0 |
Adjustments relating to prior years |
–27 |
–0.2 |
–57 |
–1.6 |
Other |
– |
– |
9 |
0.2 |
Total recognized tax expense |
–684 |
–4.3 |
–680 |
–19.2 |
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.
|
2019 |
2020 |
||||
|---|---|---|---|---|---|---|
|
Deferred |
Deferred tax liabilities |
Net |
Deferred tax assets |
Deferred tax liabilities |
Net |
Property, plant and equipment |
– |
–24 |
–24 |
– |
–24 |
–24 |
Inventories |
6 |
– |
6 |
6 |
– |
6 |
Provisions |
76 |
–21 |
55 |
86 |
–11 |
75 |
Non-interest-bearing assets and liabilities |
43 |
– |
43 |
25 |
–1 |
24 |
Total |
125 |
–45 |
80 |
117 |
–36 |
81 |
|
|
|
|
|
|
|
Offsetting |
–125 |
125 |
– |
–117 |
117 |
– |
Total deferred tax assets and liabilities |
– |
80 |
80 |
– |
81 |
81 |
Change of deferred tax in temporary differences and unused tax losses
|
2019 |
2020 |
|---|---|---|
Balance at the beginning of the year, net |
–649 |
80 |
Recognized in profit and loss |
729 |
1 |
Balance at end of year, net |
80 |
81 |
In addition to the deferred tax assets and liabilities. Sandvik reports the following tax liabilities and receivables:
|
2019 |
2020 |
|---|---|---|
Income tax liabilities |
–604 |
–11 |
Income tax receivables |
– |
– |
Net tax liabilities/receivables |
–604 |
–11 |
Accounting principles
Income tax
The Parent Company recognizes untaxed reserves including the deferred tax component.
In the consolidated financial statements, untaxed reserves are recognized in their equity and deferred tax components. Correspondingly, portions of appropriations are not allocated to deferred tax expenses in the Parent Company’s income statement.