(i) Income tax expense
for the year ended | ||
---|---|---|
31 December 2013 | 31 December 2012 | |
Current tax expense | 63,387 | 61,099 |
Change in deferred tax | 285 | 35,980 |
Correction of income tax returns of previous years | 3,704 | 270 |
Income tax expense in the income statement | 67,376 | 97,349 |
for the year ended | ||
---|---|---|
31 December 2013 | 31 December 2012 | |
Tax losses carried forward | 5,304 | 7,307 |
Receivables and other assets | 6,298 | 22,223 |
Liabilities | (14,100) | 23,642 |
Hedge valuation | (91) | (322) |
Deferred distribution fees | 1,403 | (412) |
Other property, plant and equipment and intangible assets | (815) | (19,284) |
Programming assets | 2,286 | 2,826 |
Change in deferred tax recognized in income statement – total | 285 | 35,980 |
(ii) Income tax recognized in the statement of other comprehensive income
for the year ended | ||
---|---|---|
31 December 2013 | 31 December 2012 | |
Change in deferred income tax on hedge valuation | 2,737 | (5,955) |
Change in deferred income tax recognized on currency translation adjustment – foreign operations | (1,010) | (155) |
Income tax expense recognized in other comprehensive income – total | 1,727 | (6,110) |
(iii) Effective tax rate reconciliation
for the year ended | ||
---|---|---|
31 December 2013 | 31 December 2012 | |
Gross profit | 592,821 | 695,647 |
Income tax at applicable statutory tax rate of 19% | 112,636 | 132,173 |
Tax amortization of intangible assets | (19,806) | (29,165) |
Effect of tax rates in foreign jurisdictions (*) | (1,045) | 107 |
Gain on disposal of subsidiary | (7,163) | - |
Technology tax relief | (4,520) | - |
Deferred tax unrecognized in previous periods | (10,802) | (3,462) |
Other non-taxable revenue and non-tax deductible costs, net, at 19% tax rate | (1,924) | (2,304) |
Tax expense for the year | 67,376 | 97,349 |
Effective tax rate | 11,4% | 14,0% |
(*) The Group’s entities measure current and deferred income tax applying tax rates enacted in countries in which they are domiciled:
- 9.56% for entities domiciled in Switzerland,
- 19% for entities domiciled in the Republic of Poland,
- 26% in 2012 and 22% in 2013 for entities domiciled in Sweden,
- 26% in the period of January – March 2012 and 24% in the period of April – December 2013 for entities domiciled in the United Kingdom,
- 28% for entities domiciled in Norway.
(iv) Deferred tax assets
31 December 2013 | 31 December 2012 | |
---|---|---|
Tax losses carried forward | 16,042 | 19,779 |
Liabilities | 63,353 | 50,036 |
Hedge valuation | 2,298 | 5,035 |
Tangible assets | 21,965 | 21,052 |
Programming assets | 1,496 | 981 |
Receivables and other assets | 15,571 | 26,558 |
Total deferred tax assets | 120,725 | 123,441 |
Set off of deferred tax assets and liabilities | (81,871) | (92,085) |
Deferred tax assets in the balance sheet | 38,854 | 31,356 |
(v) Tax loss
31 December 2013 | 31 December 2012 | |
---|---|---|
2013 tax loss carried forward | 6,889 | - |
2012 tax loss carried forward | 31,027 | 31,027 |
2011 tax loss carried forward | 58,484 | 122,240 |
2010 tax loss carried forward | 47,692 | 52,978 |
2009 tax loss carried forward | 20,057 | 37,830 |
2007 tax loss carried forward | - | 15,999 |
Tax losses carried forward – total | 164,149 | 260,074 |
(vi) Tax losses recognized
31 December 2013 | 31 December 2012 | |
---|---|---|
2013 tax loss carried forward | 5,328 | - |
2012 tax loss carried forward | 21,312 | 11,553 |
2011 tax loss carried forward | 36,522 | 91,631 |
2010 tax loss carried forward | 8,454 | - |
2009 tax loss carried forward | 13,656 | - |
Tax losses carried forward – total | 85,272 | 103,184 |
As at 31 December 2013 the Group recognized deferred tax asset on tax losses to the extent that it was probable that they would be utilised in the future.
According to Art. 7 of the Polish Corporate Income Tax Act dated 15 February 1992, tax losses incurred in a given financial year can be utilised in the subsequent five fiscal years. However, no more than 50% of a tax loss for any given year can be utilised in a single subsequent fiscal year.
(vii) Deferred tax liabilities
31 December 2013 | 31 December 2012 | |
---|---|---|
Receivables and other assets | 63,029 | 67,761 |
Hedge valuation | - | 91 |
Liabilities | 392 | 3,517 |
Deferred distribution fees | 18,925 | 17,522 |
Tangible and intangible assets | 99,748 | 91,906 |
Programming assets | 7,843 | 5,546 |
Total deferred tax liabilities | 189,937 | 186,343 |
Set off of deferred tax assets and liabilities | (81,871) | (92,085) |
Deferred tax liabilities in the balance sheet | 108,066 | 94,258 |