P8 Income tax

Recognized in profit and loss

Income tax expense for the year	2021	2022
Current tax	–1,254	–1,694
Adjustment of taxes attributable to prior years	67	–54
Total current tax expense	–1,187	–1,748
Deferred taxes relating to temporary differences and tax losses carried forward	–36	–44
Total tax expense	–1,223	–1,792

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:

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	2021		2022
	MSEK	%	MSEK	%
Profit after financial items	6,157		16,314
Weighted average tax based on each country’s tax rate	–1,268	–20.6	–3,361	–20.6

Tax effect of
Non-deductible expenses	–617	–10.0	–72	–0.4
Tax-exempt income	583	9.5	1,696	10.4
Adjustments relating to prior years	67	1.1	4	0.0
Other	12	0.1	–59	–0.4
Total recognized tax expense	–1,223	–19.9	–1,792	–11.0

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.

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	2021			2022
	Deferred tax assets	Deferred tax liabilities	Net	Deferred tax assets	Deferred tax liabilities	Net
Property, plant and equipment	–	–24	–24	–	–24	–24
Inventories	11	–	11	12	–	12
Provisions	–	–1	–1	–	–18	–18
Non-interest-bearing assets and liabilities	76	–17	59	77	–46	31
Total	87	–42	45	89	–88	1

Offsetting	–87	87	–	–89	89	–
Total deferred tax assets and liabilities	–	45	45	–	1	1

Change of deferred tax in temporary differences and unused tax losses

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	2021	2022
Balance at the beginning of the year, net	81	45
Recognized in profit and loss	–36	–44
Balance at end of year, net	45	1

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

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	2021	2022
Income tax liabilities	–	–214
Income tax receivables	246	–
Net tax liabilities/receivables	246	–214

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.