P7 Income tax

Recognized in profit and loss

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Income tax expense for the year
	2023	2024
Current tax	–1,023	–371
Adjustment of taxes attributable to prior years	1,544	577
Total current tax expense	521	206
Deferred taxes relating to temporary differences and tax losses carried forward	117	90
Total tax expense	638	296

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.

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Reconciliation of the Parent Company’s nominal tax rate and actual tax expense
	2023		2024
	MSEK	%	MSEK	%
Profit after financial items	4,759		8,421
Weighted average tax based on each country’s tax rate	–980	–20.6	–1,735	–20.6
Tax effect of
Non-deductible expenses	–1,626	–34.2	–126	–1.5
Tax-exempt income	1,833	38.5	1,578	18.7
Adjustments relating to prior years	1,544	32.5	577	6.9
Other	–133	–2.8	2	0.0
Total recognized tax expense	638	13.4	296	3.5

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.

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Parent Company notes – Deferred tax assets and liabilities recognized in the balance sheet
	2023			2024
	Deferred tax assets	Deferred tax liabilities	Net	Deferred tax assets	Deferred tax liabilities	Net
Property, plant and equipment	–	–24	–24	–	–24	–24
Inventories	14	–	14	23	–	23
Provisions	–	–27	–27	–	–22	–22
Non-interest-bearing assets and liabilities	160	–6	154	241	–11	230
Total	174	–57	117	264	–57	207
Offsetting	–174	174	–	–264	264	–
Total deferred tax assets and liabilities	–	117	117	–	207	207

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

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Change of deferred tax in temporary differences and unutilized tax losses carried forward
	2023	2024
Balance at the beginning of the year, net	1	117
Recognized in profit and loss	116	90
Balance at end of year, net	117	207

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

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Parent Company notes – Tax liabilities and receivables reported in addition to the deferred tax assets and liabilities
	2023	2024
Income tax liabilities	–	–
Income tax receivables	2,038	1,955
Net tax liabilities/receivables	2,038	1,955

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.

Annual Report 2024