10. Taxes

10. Taxes

The following table summarizes the income tax recognized in profit or loss for the years ended 31 December 2017 and 2016.

 

Year ended 31 December

(thousands of €)

2017

2016

Current tax

(218)

(466)

Deferred tax

20

231

Total income taxes

(198)

(235)

Current tax amounted to €0.2 million for the year ended 31 December 2017 and €0.5 million for the year ended 31 December 2016, and was related to corporate income taxes for subsidiaries operating on cost plus basis.

Deferred tax income of €0.02 million for the year ended 31 December 2017 and of €0.2 million for the year ended 31 December 2016 related to subsidiaries working on a cost plus basis and to our fee-for-service business.

Tax liabilities

The below table illustrates the tax liabilities related captions in the balance sheet as at 31 December 2017 and 2016.

 

31 December

(thousands of €)

2017

2016

Current tax payable

865

1,022

Total tax liabilities

865

1,022

On 31 December 2017, €0.9 million of tax liabilities were primarily related to one of our subsidiaries operating on a cost plus basis.

Taxes recognized in profit or loss

For the purpose of the disclosure below corporation tax was calculated at 34% (2016: 34%) – which is the tax rate applied in Belgium – on the estimated assessable profit for the year. The applied tax rate for other territorial jurisdictions was the tax rate that is applicable in these respective territorial jurisdictions on the estimated taxable result of the accounting year.

 

Year ended 31 December

(thousands of €)

2017

2016

Income / loss (–) before tax

(115,507)

54,246

Income tax debit / credit (–), calculated using the Belgian statutory tax rate (34%) on the accounting income / loss (–) before tax (theoretical)

(39,261)

18,438

Tax expenses in income statement (effective)

198

235

Difference in tax expenses / income to explain

39,458

(18,203)

 

 

 

Effect of tax rates in other jurisdictions

14

163

Effect of non taxable revenues

(11,277)

(27,399)

Effect of consolidation entry without tax impact

5,419

3,533

Effect of non tax deductible expenses

404

856

Effect of recognition of previously non recognized deferred tax assets

(414)

(421)

Effect of tax losses (utilized) reversed

(763)

(655)

Effect of non recognition of deferred tax assets

45,895

5,720

Effect of change in tax rates

181

 

Total explanations

39,458

(18,203)

The main difference between the theoretical tax and the effective tax for the year 2017 was primarily explained by the unrecognized deferred tax assets on tax losses carried forward for which we conservatively assess that it is not likely that these will be realized in the foreseeable future. The main difference between the theoretical tax and the effective tax for the year 2016 was primarily explained by non-taxable revenues which included the financial profit related to the fair value re-measurement of the share subscription agreement.

Non-taxable revenues for the years ended 31 December 2017 and 2016 were related to non-taxable subsidies and tax credits.