Note 14 – Income tax
Accounting principles
Reported income taxes includes tax which is to be paid or received regarding the current year, adjustments regarding the current tax for previous years, and changes in deferred taxes.
All tax liabilities/tax assets are measured at the nominal amount in accordance with the tax rules and tax rates decided upon or announced and which in all likelihood will be adopted.
With respect to items reported in the income statement, the associated tax consequences are also recognized in the income statement. The tax consequences of items recognized directly in equity are recognized in equity, and the tax consequences of items recognized reported in comprehensive income are recognized in comprehensive income.
Deferred tax is calculated in accordance with the balance sheet method on all temporary liabilities which arise between accounting and tax values of assets and liabilities. Deferred tax assets with respect to loss carry-forwards or other future taxable deductions are recognized to the extent it is likely that the deduction may be set off against surpluses in conjunction with future taxation. Deferred tax liabilities relating to temporary differences attributable to investments in subsidiaries and branches are not recognized in the consolidated financial statements since the Parent Company can, in all cases, determine the date for reversal of the temporary differences and it is not deemed likely that a reversal will be made within the foreseeable future.
| Group | Parent Company | |||||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Koncernen | Moderbolaget | |||||
| MSEK | 2019 | 2018 | 2019 | 2018 | ||
| Current tax for the year | Aktuell skatt för året | -123 | -95 | -59 | -33 | |
| Current tax attributable to previous years | Aktuell skatt hänförlig till tidigare år | -1 | -2 | -3 | 1 | |
| Deferred tax attributable to previous years | Uppskjuten skatt hänförlig till tidigare år | 0 | 0 | – | – | |
| Deferred tax | Uppskjuten skatt | 20 | 19 | 0 | -1 | |
| Tax on income for the year | Skatt på årets resultat | -103 | -79 | -63 | -33 | |
Deferred tax in the income statement consists of the following items:
| Group | Parent Company | |||||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Koncernen | Moderbolaget | |||||
| MSEK | 2019 | 2018 | 2019 | 2018 | ||
| Deferred tax, internal profit on inventories | Uppskjuten skatt, internvinst i lager | 2 | -3 | – | – | |
| Deferred tax, untaxed reserves | Uppskjuten skatt, obeskattade reserver | -2 | -1 | – | – | |
| Deferred tax, appraised loss carry-forwards | Uppskjuten skatt, värderade förlustavdrag | 14 | 0 | – | – | |
| Deferred tax, Intangible assets | Uppskjuten skatt, immateriella tillgångar | 8 | 13 | – | – | |
| Deferred tax, other | Uppskjuten skatt, övrigt | -2 | 9 | 0 | -1 | |
| Total deferred tax | Summa uppskjuten skatt | 20 | 19 | 0 | -1 | |
Income tax on the Group’s income before tax differs from the theoretical amount which would have arisen upon use of a weighted average tax rate for income in the consolidated companies in accordance with the following:
| Group | Parent Company | |||||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Koncernen | Moderbolaget | |||||
| MSEK | 2019 | 2018 | 2019 | 2018 | ||
| Reported income before tax | Redovisat resultat före skatt | 377 | 328 | 346 | 289 | |
| Tax according to applicable tax rate | Skatt enligt gällande skattesats | -81 | -76 | -75 | -64 | |
| Tax effect of non-deductible expenses | Skatteeffekt av ej avdragsgilla kostnader | -22 | -9 | -5 | -1 | |
| Tax effect of non-taxable income | Skatteeffekt av ej skattepliktiga intäkter | 1 | 6 | 20 | 31 | |
| Tax income/expenses due to changed tax rate | Skatteintäkt/kostnad pga ändrad skattesats | 0 | 2 | – | 0 | |
| Adjustments relating to previous years | Justering avseende tidigare år | -1 | -2 | -3 | 1 | |
| Tax on income for the year in accordance with the income statement | Skatt på årets resultat enligt resultaträkningen | -103 | -79 | -63 | -33 | |
Tax rate
The weighted average tax rate in the Group was 21.5% (2018: 23.0%). The Parent Company’s applicable income tax rate is 21.4% (2018: 22%). As of the 2019 financial year, Swedish corporate tax was reduced from 22 percent to 21.4 percent, and will be further reduced to 20.6 percent from the 2021 financial year.
Temporary differences
Temporary differences arise in those cases where the accounting and tax values of assets or liabilities differ. Changes are in deferred tax assets and liabilities during the year, without consideration given to set-offs made under the same tax entitlement.
Deferred tax assets
| SEK m‚ Group | Loss carry-forwards | Internal profit | Pensions | Structural expenses | Other | Total | ||
| MSEK‚ Koncernen | Förlust avdrag | Intern vinst | Pensioner | Struktur-kostnader | Övrigt | Summa | ||
| At December 31‚ 2017 | Per 31 december 2017 | 2 | 3 | 19 | 5 | 20 | 49 | |
| Recognized in income statement | Redovisat i resultaträkningen | 0 | -3 | 2 | 2 | 4 | 5 | |
| Effect of changed tax rates reported in the income statement | I resultaträkningen redovisad effekt av ändrade skattesatser | – | – | 0 | 0 | 1 | 1 | |
| Recognized in other comprehensive income | Redovisat i övrigt totalresultat | – | – | -1 | – | – | -1 | |
| Acquired tax assets | Förvärvad skattefordran | – | – | – | – | 4 | 4 | |
| Exchange differences | Valutakursdifferenser | 0 | 0 | 0 | 0 | -1 | -1 | |
| At December 31‚ 2018 | Per 31 december 2018 | 2 | 0 | 20 | 7 | 28 | 57 | |
| Recognized in income statement | Redovisat i resultaträkningen | 14 | 2 | 0 | -1 | -3 | 12 | |
| Recognized in other comprehensive income | Redovisat i övrigt totalresultat | – | – | 5 | – | – | 5 | |
| Acquired tax assets | Förvärvad skattefordran | – | – | – | – | 0 | 0 | |
| Exchange differences | Valutakursdifferenser | 0 | 0 | 0 | 0 | 1 | 1 | |
| At December 31‚ 2019 | Per 31 december 2019 | 16 | 2 | 25 | 6 | 26 | 75 |
Deferred tax liabilities
| SEK m‚ Group | Untaxed reserves | Intangible assets | Other | Total | ||
| MSEK‚ Koncernen | Obeskattade reserver | Immateriella tillgångar | Övrigt | Summa | ||
| At December 31‚ 2017 | Per 31 december 2017 | 38 | 68 | 32 | 138 | |
| Recognized in income statement | Redovisat i resultaträkningen | 0 | -13 | -1 | -14 | |
| Effect of changed tax rates reported in the income statement | I resultaträkningen redovisad effekt av ändrade skattesatser | 1 | – | – | 1 | |
| Acquired tax liability | Förvärvad skatteskuld | – | 5 | – | 5 | |
| Exchange rate differences | Valutakursdifferenser | – | 4 | – | 4 | |
| At December 31‚ 2018 | Per 31 december 2018 | 39 | 63 | 31 | 134 | |
| Recognized in income statement | Redovisat i resultaträkningen | 3 | -13 | 2 | -8 | |
| Acquired tax liability | Förvärvad skatteskuld | – | 0 | – | 0 | |
| Exchange rate differences | Valutakursdifferenser | – | 4 | – | 4 | |
| At December 31‚ 2019 | Per 31 december 2019 | 42 | 55 | 33 | 130 |
Intangible assets refer to deferred tax on acquired customer relationships and trademarks. Other includes deferred tax on differences between the book and plan values of fixed assets.
The deferred tax is measured in accordance with the applicable tax rate in each country.
| Deferred tax assets | Deferred tax liabilities | |||||||
| SEK m, Parent Company | Loss carry-forwards | Structural expenses | Financial instruments | Other | Total | Other | ||
| Uppskjutna skattefordringar | Uppskjutna skatteskulder | |||||||
| MSEK, Moderbolaget | Förlust avdrag | Struktur-kostnader | Finansiella instrument | Övrigt | Summa | Övrigt | ||
| At December 31‚ 2017 | Per 31 december 2017 | 0 | 4 | 1 | 13 | 19 | 12 | |
| Recognized in income statement | Redovisat i resultaträkningen | – | 0 | -1 | 0 | -1 | 0 | |
| Recognized in other comprehensive income | Redovisat i övrigt totalresultat | – | – | – | – | 0 | – | |
| Exchange differences | Valutakursdifferenser | – | – | – | – | 0 | – | |
| At December 31‚ 2018 | Per 31 december 2018 | 0 | 4 | 1 | 13 | 18 | 12 | |
| Recognized in income statement | Redovisat i resultaträkningen | – | 0 | 0 | -2 | -2 | 2 | |
| Recognized in other comprehensive income | Redovisat i övrigt totalresultat | – | – | – | – | 0 | – | |
| Exchange differences | Valutakursdifferenser | – | – | – | – | 0 | – | |
| At December 31‚ 2019 | Per 31 december 2019 | 0 | 4 | – | 11 | 16 | 14 | |
Other refers to deferred entitlement to deductions and payroll tax on direct pensions.
Deferred tax assets and liabilities are set off when there is a legal right of set-off for the relevant tax assets and liabilities and when deferred taxes relate to the same tax authority. No set-off has taken place.
| Group | Parent Company | |||||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Koncernen | Moderbolaget | |||||
| MSEK | 2019 | 2018 | 2019 | 2018 | ||
| Deferred tax assets | Uppskjutna skattefordringar | |||||
| Utilize after more than 12 months | Utnyttjas efter mer än 12 månader | 51 | 53 | 15 | 18 | |
| Utilize within 12 months | Utnyttjas inom 12 månader | 24 | 4 | 1 | 1 | |
| Total | Summa | 75 | 57 | 16 | 19 | |
| Deferred tax liabilities | Uppskjutna skatteskulder | |||||
| Utilize after more than 12 months | Utnyttjas efter mer än 12 månader | 117 | 115 | 14 | 12 | |
| Utilize within 12 months | Utnyttjas inom 12 månader | 13 | 19 | – | – | |
| Total | Summa | 130 | 134 | 14 | 12 | |
The net change regarding deferred taxes is as follows:
| Group | Parent Company | |||||
| SEK m | 2019 | 2018 | 2019 | 2018 | ||
| Koncernen | Moderbolaget | |||||
| MSEK | 2019 | 2018 | 2019 | 2018 | ||
| Opening balance | Ingående balans | -77 | -89 | 6 | 7 | |
| Recognized in income statement | Redovisat i resultaträkningen | 20 | 19 | -4 | -1 | |
| Recognized in other comprehensive income | Redovisat i övrigt totalresultat | 5 | -1 | – | – | |
| Acquired tax liability | Förvärvad skatteskuld | 0 | -1 | – | – | |
| Exchange differences | Valutakursdifferenser | -3 | -5 | – | – | |
| Closing balance | Utgående balans | -55 | -77 | 2 | 6 | |