23. Deferred tax
Following table shows the movements in deferred tax assets and deferred tax liabilities:
(thousands of €) |
Retirement benefit liabilities |
Tax loss carryforward |
Property, plant and equipment |
Other |
Total deferred tax assets |
|---|---|---|---|---|---|
On 1 January 2022 |
776 |
3,133 |
- |
122 |
4,032 |
Credited/charged (-) to profit or loss |
17 |
(1,797) |
|
165 |
(1,615) |
Reclassifications |
|
(275) |
|
|
(275) |
Charged to other comprehensive income/loss (-) |
(795) |
|
|
|
(795) |
Translation differences |
22 |
|
|
(6) |
15 |
On 31 December 2022 |
19 |
1,061 |
- |
281 |
1,363 |
Credited/charged (-) to profit or loss |
|
(1,061) |
298 |
692 |
(72) |
Reclassifications to assets in disposal group classified as held for sale |
|
|
|
(292) |
(292) |
Charged to other comprehensive income/loss (-) |
132 |
|
|
|
132 |
Translation differences |
8 |
|
(6) |
(6) |
(4) |
On 31 December 2023 |
159 |
- |
292 |
675 |
1,126 |
(thousands of €) |
Intangible assets other than goodwill |
Other |
Total deferred tax liabilities |
|---|---|---|---|
On 1 January 2022 |
- |
- |
- |
Impact of acquisitions of businesses |
(23,265) |
|
(23,265) |
Credited/charged (-) to profit or loss |
2,842 |
|
2,842 |
Reclassifications |
275 |
|
275 |
On 31 December 2022 |
(20,148) |
- |
(20,148) |
Credited/charged (-) to profit or loss |
(1,458) |
(2,019) |
(3,477) |
Translation differences |
18 |
|
18 |
On 31 December 2023 |
(21,588) |
(2,019) |
(23,607) |
The unrecognized deferred tax assets on 31 December 2023 amount to €326.8 million (as compared to €460.1 million on 31 December 2022).
The total amount of tax attributes and deductible temporary differences at 31 December 2023 amounted to €1,722.2 million (at 31 december 2022: €1,882.5 million). This is composed of i) consolidated tax losses carried forward and deductible temporary differences at 31 December 2023 amounting to €1,312.2 million (at 31 december 2022: €1,516.6 million), and (ii) innovation income deduction, dividend received deduction and investment deduction carried forward at 31 December 2023 amounting to €410.0 million (at 31 december 2022: €365.9 million).
The available tax losses carried forward that can be offset against possible future taxable profits amounted to €798.7 million on 31 December 2023 (€883.6 million on 31 December 2022) and can be carried forward for an indefinite period except for an amount of €2.2 million in the United States with expiry date between 2028 and 2034. On 31 December 2023, the available tax losses carried forward in Galapagos NV (Belgium) amounted to €757.9 million (2022: €769.9 million). In addition to the latter, Galapagos NV (Belgium) also benefits from the Belgian innovation income deduction regime which led to report, on 31 December 2023, a carried forward tax deduction amounting to €390.3 million (2022: €346.2 million) that can also be offset against possible future taxable results. In addition, Galapagos NV (Belgium) also has available investment deduction carried forward of €1 million (2022: €1 million) and dividend received deduction carried forward of €18.7 million (2022: €18.7 million) that can be offset against possible future taxable profits. There is no limit in time for the innovation income deduction, the dividend received deduction and investment deduction carried forward.
With the exception of 2019 and 2023, we have a history of losses. We forecast to continue incurring taxable losses in the foreseeable future as we continue to invest in clinical and preclinical development programs and discovery platforms. Consequently, no net deferred tax asset was recognized as at 31 December 2023, except for our subsidiaries operating on a cost plus basis, for which a deferred tax asset was recognized for €1.1 million (2022: €1.1 million).
Net deferred tax liabilities were initially calculated based on the fair value of the intangible assets identified from the acquisition of CellPoint and AboundBio, adjusted by considering the related recognizable deferred tax assets. We refer to note 27 for more information on the purchase price allocation of the business combinations.