P8 Income tax

Recognized in profit and loss

Income tax expense for the year

2019

2020

Current tax

–1,326

–624

Adjustment of taxes attributable to prior years

–87

–57

Total current tax expense

–1,413

–681

Deferred taxes relating to temporary differences and tax losses carried forward

729

1

Total tax expense

–684

–680

Reconciliation of the Parent Company’s tax expense

The Parent Company’s effective tax rate is lower than the nominal tax rate in Sweden, mainly due to received dividends from shares in group companies which are non-taxable incomes.

Reconciliation of the Parent Company’s nominal tax rate and actual tax expense:

 

2019

2020

 

MSEK

%

MSEK

%

Profit after finanical items

15,821

 

3,547

 

Weighted average tax based on each country’s tax rate

–3,386

–21.4

–759

–21.4

 

 

 

 

 

Tax effect of

 

 

 

 

Non-deductible expenses

–68

–0.4

–51

–1.4

Tax-exempt income

2,797

17.7

178

5.0

Adjustments relating to prior years

–27

–0.2

–57

–1.6

Other

9

0.2

Total recognized tax expense

–684

–4.3

–680

–19.2

Recognized in the balance sheet

Deferred tax assets and liabilities

The deferred tax assets and liabilities recognized in the balance sheet are attributable to the following assets and liabilities.

 

2019

2020

 

Deferred
tax assets

Deferred tax liabilities

Net

Deferred tax assets

Deferred tax liabilities

Net

Property, plant and equipment

–24

–24

–24

–24

Inventories

6

6

6

6

Provisions

76

–21

55

86

–11

75

Non-interest-bearing assets and liabilities

43

43

25

–1

24

Total

125

–45

80

117

–36

81

 

 

 

 

 

 

 

Offsetting

–125

125

–117

117

Total deferred tax assets and liabilities

80

80

81

81

Change of deferred tax in temporary differences and unused tax losses

 

2019

2020

Balance at the beginning of the year, net

–649

80

Recognized in profit and loss

729

1

Balance at end of year, net

80

81

In addition to the deferred tax assets and liabilities. Sandvik reports the following tax liabilities and receivables:

 

2019

2020

Income tax liabilities

–604

–11

Income tax receivables

Net tax liabilities/receivables

–604

–11

Accounting principles

Income tax

The Parent Company recognizes untaxed reserves including the deferred tax component.

In the consolidated financial statements, untaxed reserves are recognized in their equity and deferred tax components. Correspondingly, portions of appropriations are not allocated to deferred tax expenses in the Parent Company’s income statement.