G11 Income tax

Recognized in the income statement

The Group’s recognized tax expense for the continuing operations for the year amounted to SEK 4,493 million (4,884) or 22.7 percent (27.5) of profit before tax.

Reconciliation of the tax expense

The Group’s weighted average tax rate for the continuing operations, calculated in accordance with the statutory tax rate in each country, is 22.6 percent (22.8). The tax rate in Sweden is 20.6 percent (20.6).

Reconciliation of the Group’s weighted average tax rate, based on the tax rate in each country, and the Group’s actual tax expense:

Tax items attributable to other comprehensive income

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.

Unrecognized deferred tax assets

Tax losses carried forward for which no deferred tax asset has been recognized amount to SEK 2,555 million and are distributed as follows:

The expiry dates of these tax losses carried forward are distributed as follows:

In addition, the Group has unrecognized deferred tax assets which amount to SEK 185 million related to interest deduction limitations in the USA.

Change of deferred tax in temporary differences and unutilized tax losses carried forward

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

OECD Pillar II model rules

Sandvik Group is within the scope of the OECD Pillar II model rules. Pillar II legislation was enacted in Sweden, the jurisdiction in which Sandvik AB is incorporated, and came into effect from January 1, 2024. Since the Pillar II legislation was not effective at the reporting date, the Group has no related current tax exposure. The Group applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar II income taxes, as provided in the amendments to IAS 12 issued in May 2023.

Under the legislation, the Group is liable to pay a top-up tax for the difference between their GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group is in the process of assessing its exposure to the Pillar II legislation for when it comes into effect. This assessment indicates that most jurisdictions in which the Group operates have an effective tax rate exceeding 15% according to the transitional safe harbor rules. The assessment also indicates that the Group will not be exposed to paying any material Pillar II income taxes. Due to the complexities in applying the legislation and calculating GloBE income, a more detailed quantitative impact of the enacted legislation is not yet reasonably estimable. The company is currently engaged with tax specialists to assist with applying the legislation.