22. Income Taxes
FINANCIAL STATEMENTS
The major components of income tax expense for 2014, 2013 and 2012 were:
(in millions of
2014
2013
2012
Continuing operations
Current tax
185
160
119
Taxes related to prior years recorded in the current year
(15)
(1)
(57)(1)
Other (current tax related)
2
2
Deferred tax
(114)(4)
(67)
(39)
Deferred taxes related to prior years recorded in the current year
9
5
Recognition of deferred tax on previously unrecognized tax losses and tax credits
(1)
(6)
Derecognition of previously recorded deferred tax assets
1
18
Deferred tax expense relating to changes in tax rates or the imposition of new taxes
(8)(3)
13(2)
Total income tax expense from continuing operations
66
85
55
Discontinued operations
Current tax
(8)
(8)
(10)
Deferred tax
(40)(5)
(17)
(24)
Total income tax expense from discontinued operations
(48)
(25)
(34)
Total income tax expense from continuing and discontinued operations
18
60
21
(1) Relates primarily to the resolution of several tax matters in the U.S. which resulted in the recognition of an income tax benefit.
(2) End 2012, the Serbian government enacted an increase in tax rate from 10% to 15%, effective as from January 1, 2013.
(3) Relates to the benefit we recognized as a result of the reorganization of some of our US operations, which is slightly offset by an increase in the Greek tax rate
from 20% to 26%.
(4) Relates primarily to both the carryforward of exempted dividend income and the reorganization expenses in Belgium.
(5) Relates primarily to the impairment loss associated with the planned sale of Bottom Dollar Food.
Reconciliation of effective tax rate:
(in millions of
2014
2013
2012
Profit before taxes and discontinued operations
255
357
352
Share of results of joint venture equity accounted
(4)
(4)
(4)
Result from discontinued operations, before taxes
(147)
(115)
(228)
Total profit before taxes, excl. share of results of joint venture
104
238
120
Assumed taxes applying the Group's domestic tax rate (33.99%)
35
81
41
Effect of different tax rates in jurisdictions outside Belgium
10
24
32
Taxes related to prior years recorded in current year
(6)
(1)
(52)(2)
Tax effects of:
Changes in tax rate or imposition of new taxes
(4)
(8)(4)
13(3)
Non taxable income
(32)
(36)
(32)
Non deductible expenses
30
30
28
Deductions from taxable income(1)
(35)
(42)
(44)
Tax charges on dividend income
4
3
8
(Recognition) non recognition of deferred tax assets
16
7
24
Other
2
3
Total income tax expense from continuing and discontinued operations
18
60
21
Effective income tax rate
17.5%
25.2%
17.5%
(1) Deductions from taxable income relate to notional interest deduction in Belgium and tax credits in other countries.
(2) Relates primarily to the resolution of several tax matters in the U.S. which resulted in the recognition of an income tax benefit.
(3) In December 2012, the Serbian government enacted an increase in tax rate from 10% to 15%, effective as from January 1, 2013.
(4) Relates to the benefit we recognized as a result of the reorganization of some of our US operations, which is slightly offset by an increase in the Greek tax rate
from 20% to 26%.
The aggregated amount of current and deferred tax charged or (credited) directly to equity was as follows:
(in millions of
2014
2013
2012
Current tax
1
(1)
2
Deferred tax
(5)
2
(5)
Total tax charged (credited) directly to equity
(4)
1
(3)
