24. Deferred tax

24. Deferred tax

 

Year ended 31 December,

(thousands of €)

2014

2013

Recognized deferred tax assets and liabilities

 

 

Assets

293

4,558

Liabilities

 

(2,192)

 

 

 

Continuing operations

 

 

Assets

293

 

Liabilities

 

 

 

 

 

Discontinued operations

 

 

Assets

 

4,558

Liabilities

 

(2,192)

 

 

 

Deferred tax assets unrecognized

104,484

105,529

Continuing Operations

104,484

100,160

Discontinued Operations

 

5,369

 

 

 

Deferred taxes

496

3,280

Continuing operations

293

(676)

Tax benefit arising from previously unrecognized tax assets used to reduce deferred tax expense (+)

293

 

Deferred tax expenses relating to write down of previously recognized deferred tax assets

 

(676)

 

 

 

Discontinued operations

203

3,956

Deferred tax expenses net relating to origination and reversal of temporary differences

203

427

Tax benefit arising from previously unrecognized tax assets used to reduce deferred tax expense (+)

 

3,529

The notional interest deduction for an amount of €2.6 million (2013: €2.6 million) and the investment deduction of €1 million (2013: €1 million) could give rise to deferred tax assets. The amount of notional interest deduction that has been accumulated in the past can be carried forward for maximum seven years, the notional interest deduction of 2012 and following years will not be carried forward according to a change in the Belgian tax legislation. There is no limit in time for the investment deduction.

The consolidated unused tax losses carried forward at 31 December 2014 amounted to €315 million (2013: €329 million), €21.8 million were related to unrecognized tax losses with expiry date between 2015 and 2029.

The available statutory tax losses carried forward that can be offset against future statutory taxable profits amounted to €220 million on 31 December 2014. These statutory tax losses can be compensated with future statutory profits for an indefinite period except for an amount of €18 million in Switzerland, Croatia, the US and The Netherlands with expiry date between 2015 and 2029. On 31 December 2014, the available tax losses carried forward in Galapagos NV (Belgium) amounted to €136 million.

For one subsidiary operating on a cost plus basis for the group a deferred tax asset was set up for an amount of €0.3 million in 2014 (2013: €0 million).

A deferred tax asset for tax losses carried forward, which are limited in time (three years), was reversed for the Croatian subsidiary for an amount of €0.7 million in 2013 because of the current year loss and forecasted losses in the near future due to the fact that the entity is in a transition period to go from an R&D subcontractor company to a fee-for-service company.

The deferred tax assets and liabilities recorded on the balance sheet at 31 December 2013 related to discontinued operations.

The Group has a history of losses. Excluding the impact of possible upfront or milestone payments to be received from collaborations, the Group forecasts to continue incurring taxable losses in the foreseeable future as it continues to invest in clinical and pre-clinical development programs and discovery platforms. Consequently, no deferred tax asset has been set up as at 31 December 2014, except for one subsidiary operating on a cost plus basis for the group for which a minor deferred tax asset was set up (of €0.3 million as explained above).