112 / 364
4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Income tax
DANONE
REGISTRATION DOCUMENT 2015
112
NOTE 8. INCOME TAX
Note 8.1. Income tax
Income before tax and tax expense
Year ended December 31
(in € millions except tax rate in percentage)
2014
2015
Income before tax
1,839
1,925
Current tax (expense) income
(693)
(805)
Deferred tax (expense) income
94
179
Current and deferred tax (expense) income
(599)
(626)
Effective tax rate
32.6%
32.5%
Amount (paid) received during the year
(601)
(804)
Tax rate and tax systems
French tax system
Danone forms a tax group with most of its French subsidiaries in
which it owns, directly or indirectly, more than 95% of the share
capital, enabling taxable profits and losses to be offset subject to
certain limits and conditions.
The statutory tax rate for companies with sales exceeding €250 mil-
lion was raised to 38% in 2013 following a temporary increase in
the surtax on corporate income from 5% to 10.7%. This measure is
applicable for two years,
i.e
. until 2015. Nevertheless, the current
and deferred tax rates of these companies wasmaintained at 34.43%
since the tax loss carryforwards are expected to be recovered
beyond this two-year period.
Other tax systems
Similar tax grouping arrangements exist in other countries, in par-
ticular in the United States, the Netherlands, the United Kingdom,
Germany and Spain.
Effective tax rate
In 2015, the Group effective tax rate was 32.5%, relatively stable in
comparison with 2014.
As is the case with the Group's business activity (see breakdown of
sales by country in Note 5.2 of the Notes to the consolidated financial
statements), the Group's current and deferred tax expense is also
relatively well distributed across several countries, with no single
dominant country.
Difference between effective tax rate and 34.43% statutory tax rate in France
Year ended December 31
(in percentage)
Notes
2014
2015
Statutory tax rate in France
34.4%
34.4%
Differences between French and foreign tax rates
(a)
(12.4)%
(12.3)%
Tax on dividends and royalties
(b)
4.1%
3.6%
Permanent differences
3.0%
2.2%
Tax loss carryforwards
(c)
6.2, 8.3
1.0%
4.2%
Tax adjustments and unallocated taxes
(d)
3.0%
1.6%
Impact of capital gains and losses on disposal and asset
impairment
0.3%
(0.2)%
Other differences
(0.8)%
(1.0)%
Effective income tax rate
32.6%
32.5%
(a) Various countries, none of which generates a significant difference with the French tax rate.
(b) Includes the contribution of costs and expenses and withholding taxes on dividends and royalties and the impact of the 3% dividends tax.
(c) In 2015, includes the impacts of deferred tax asset impairment on Dumex's activity in China.
(d) In 2015 as in 2014, corresponds mainly to tax adjustments, unallocated taxes and net changes in provisions for tax risks, partially offset by the favorable
change in tax rates.