The changes in deferred tax assets and liabilities are as follows.
(in millions of euros) | net balance as at 1 January 2016 | Recognised in income statement | Recognised in comprehensive income | Other changes | Net position Positions per 31 December 2016 | Deferred tax assets | Deferred tax liabilities |
Property, plant and equipment | -109 | -8 | - | -1 | -118 | 23 | 141 |
Intangible assets | -7 | - | - | -2 | -9 | - | 9 |
Non-current financial assets | -11 | 9 | -2 | 1 | -3 | 4 | 7 |
Receivables | - | - | - | - | - | - | - |
Provisions | - | 3 | -3 | 1 | 1 | 2 | 1 |
Deferred credits | 73 | -9 | - | 1 | 65 | 65 | - |
Loans and other financial obligations | 13 | -1 | -6 | -2 | 4 | 4 | - |
Other items | -1 | - | - | -1 | -2 | - | 2 |
Loss compensation | 152 | -21 | - | - | 131 | 131 | - |
Deferred tax assets (liabilities) | 110 | -27 | -11 | -3 | 69 | 229 | 160 |
(in millions of euros) | net balance as at 1 January 2017 | Recognised in income statement | Recognised in comprehensive income | Other changes | Net position Positions per 31 December 2017 | Deferred tax assets | Deferred tax liabilities |
Property, plant and equipment | -118 | 201 | - | - | 83 | 111 | 28 |
Intangible assets | -9 | -1 | - | -8 | -18 | - | 18 |
Non-current financial assets | -3 | -4 | -2 | 1 | -8 | 4 | 12 |
Receivables | - | - | - | 2 | 2 | - | -2 |
Provisions | 1 | - | - | -2 | -1 | - | 1 |
Deferred credits | 65 | -8 | - | 1 | 58 | 58 | - |
Loans and other financial obligations | 4 | -1 | - | -1 | 2 | 2 | - |
Other items | -2 | 2 | - | -1 | -1 | 1 | 2 |
Loss compensation | 131 | -46 | - | -1 | 84 | 84 | - |
Deferred tax assets (liabilities) | 69 | 143 | -2 | -9 | 201 | 260 | 59 |
Net operating losses that are categorised as tax losses under Dutch tax law and that arose in the Dutch subsidiaries can in general be offset against future profits recorded in the nine years after the year in which the loss was suffered, and can be offset against the profit recorded in the year preceding the year of the loss. There are comparable rules for the positions in foreign enterprises.
On 31 December 2017, after coordinating matters with the relevant tax authorities, the main rail network rolling stock portfolio, which had been held by the Irish subsidiary NSFSC, was transferred to a Dutch company. This company is part of the fiscal unity in the Netherlands.
As at 31 December 2017, the Group had deferred tax assets of €233 million for the fiscal unity in the Netherlands (€205 million as at 31 December 2016). These deferred tax assets are partly covered by deferred tax liabilities that produce taxable profits in the reference period through to 2024 and forecast profits through to 2024, based on the Concern Plan 2018-2022. The forecasts assume the current breakdown of the Group’s activities, taking account of the main rail network franchise that started on 1 January 2015 and the effect of the transfer of the main rail network rolling stock portfolio from the Irish subsidiary NSFSC to the Netherlands on 31 December 2017. The reversal of the downward value adjustment of the Dutch component of the deferred tax assets (€67 million) is the result of higher expected results from the fiscal unity in the Netherlands due to the transfer of the main rail network rolling stock. The adjustments to previous years largely arise from the finalisation of the tax audit initiated by the Dutch tax authorities in order to examine the tax treatment of the lease contracts concluded by Dutch companies.
A rate of 25% applied in 2017 for Dutch corporate income tax (25% in 2016). The applicable rate of 25% was assumed for the calculation of the deferred tax position of the Dutch entities.
Accounting policies
The deferred tax assets and deferred tax liabilities arise from temporary differences between the carrying amount of assets and liabilities in the financial reporting and the carrying amount for tax purposes. These are calculated on the basis of the tax rates that are expected to apply when the temporary differences are reversed, using tax rates enacted or substantively enacted as at the reporting date.
Deferred tax assets, including those deriving from tax loss carry-forwards, are measured if it is probable that sufficient tax profits will be available for claiming the losses and if possibilities for offsetting losses can be utilised.
Deferred tax assets and deferred tax liabilities are only netted if there is a formal netting right and the company intends to settle deferred tax positions simultaneously. Deferred tax positions are stated at nominal value.