10. Taxes
The following table summarizes the income tax recognized in profit or loss for the years ended 31 December 2016 and 2015.
|
Year ended 31 December |
|
(thousands of €) |
2016 |
2015 |
Current tax |
(466) |
(215) |
Deferred tax |
231 |
1,433 |
Total income taxes |
(235) |
1,218 |
Current tax amounted to €0.5 million for the year ended 31 December 2016 and €0.2 million for the year ended 31 December 2015, and was related to taxes for subsidiaries operating on cost plus basis.
Deferred tax income of €0.2 million for the year ended 31 December 2016 and of €1.4 million for the year ended 31 December 2015 related to subsidiaries working on a cost plus basis.
Tax liabilities
The below table illustrates the tax liabilities related captions in the balance sheet as at 31 December 2016 and 2015.
|
31 December |
|
(thousands of €) |
2016 |
2015 |
Current tax payable |
1,022 |
2,583 |
Total tax liabilities |
1,022 |
2,583 |
On 31 December 2015, tax liabilities included €2.6 million primarily related to the recognition of tax liabilities for two subsidiaries operating on a cost plus basis. This amount was partly due to a tax audit on the years 2008 to 2011 and underlying proposed tax adjustment amounting to €1.9 million in cash and decrease of our tax losses carried forward for €19.5 million. A liability was recognized in 2014 considering this claim and the potential risk, partly under current tax liability for €1.3 million and partly as a decrease of the R&D incentives receivables for €0.6 million. The tax adjustment was settled in cash in the fourth quarter of 2016. However, discussions are still ongoing with regard to this claim.
In addition, taxes on gain on the sale of the service division in 2014 were included in the tax liabilities on 31 December 2015 for €0.4 million and were paid in 2016.
On 31 December 2016, €1.0 million of tax liabilities were primarily related to two of our subsidiaries operating on a cost plus basis.
Taxes recognized in profit or loss
Corporation tax was calculated at 34% (2015: 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 €) |
2016 |
2015 |
Income / loss (–) before tax |
54,246 |
(119,627) |
Income tax debit / credit (–), calculated using the Belgian statutory tax rate (34%) on the accounting income / loss (–) before tax (theoretical) |
18,438 |
(40,661) |
Tax expenses / income (–) in income statement (effective) |
235 |
(1,218) |
Difference in tax expenses / income to explain |
(18,203) |
39,444 |
|
|
|
Effect of tax rates in other jurisdictions |
163 |
328 |
Effect of non taxable revenues |
(27,399) |
(5,934) |
Effect of consolidation entry without tax impact |
2 |
57 |
Effect of non tax deductible expenses |
4,387 |
12,378 |
Effect of recognition of previously non recognized deferred tax assets |
(421) |
(1,307) |
Effect of tax losses (utilized) reversed |
(655) |
(597) |
Effect from under or over provisions in prior periods |
|
58 |
Effect of non recognition of deferred tax assets |
5,720 |
34,783 |
Effect of R&D tax credit claims |
|
(322) |
Total explanations |
(18,203) |
39,444 |
The main difference between the theoretical tax and the effective tax for the years 2016 and 2015 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.
Non-taxable revenues for the years ended 31 December 2016 and 2015 were related to non-taxable subsidies and tax credits. Non-taxable revenues in 2016 included also the financial profit related to the fair value re-measurement of the share subscription agreement.