4.4 Legal risk - Scor

20.1.6.19 NOTE 19 – INCOME TAXES
INCOME TAX EXPENSE
The main components of income taxes for the years ended 31 December 2012, 2011 and 2010 are presented below:
In EUR million 2012 2011 2010
Amounts reported in the consolidated statements of income
Current tax – current year (152) (74) (114)
Current tax – prior years 14 (22) 18
Deferred taxes due to temporary differences 44 16 (5)
Deferred taxes from tax losses carried-forward (16) 79 22
Changes in deferred taxes due to changes in tax rates or tax law 2 1 43
INCOME TAX (EXPENSE) / BENEFIT REPORTED IN
STATEMENT OF INCOME (108) - (36)
In consolidated reserves
Revaluation of AFS assets (98) 82 (1)
Other 25 1 6
INCOME TAX (EXPENSE) / BENEFIT REPORTED IN EQUITY (73) 83 5
RECONCILIATION OF EXPECTED TO ACTUAL TAX EXPENSE
A reconciliation of the income tax expense, obtained by applying the French tax rate of 36.10% for 2012 and 2011 and
34.43% for 2010 to income before income taxes to the actual income tax expense recorded in the statement of income is
presented in the table below. The effective rate in 2012 is 20.4% (2011: 0.0% and 2010: 7.8%).
The main reconciling items are due to the difference between local income tax rate of each taxable entity and the Group tax
rate, permanent differences reported by each entity, reduced rates and specific items.
In EUR million 2012 2011 2010
Income before income tax 526 330 455
Theoretical income tax at 36.10% (for 2012 and 2011) and
34.43% (for 2010) (190) (119) (157)
Reconciling items to actual income tax (expense) / benefit
Differences between French and local tax rates 91 53 43
Tax-exempt income (1) 4 61 15
Non-deductible expenses (15) (16) (6)
Recognition or utilization of tax losses for which no deferred tax
assets have been recognized - - 5
Write-down and reversal of previous write-down of deferred tax
assets (3) 13 52
Changes in tax risk provision (1) (25) (21)
Non creditable / refundable withholding tax (3) (4) (1)
Changes in tax rates 2 3 43
Share based payments (8) 2 (5)
Income taxes prior years 16 37 (4)
Others (1) (5) -
ACTUAL TAX (EXPENSE) / BENEFIT (108) - (36)
2011 included the recognition of tax-exempt gain from bargain purchase for the acquired Transamerica Re business
resulting in a EUR 44 million reconciling item.The exceptional contribution on income tax has been renewed by the Finance
Bill 2013 for two more years and therefore will be applicable for all fiscal years between 31 December 2012 and
31 December 2015. As a result, the income tax rate will remain at 36.10% for these fiscal years (against 34.43% for 2010)
and will be 34.43% again from fiscal year 2016 onwards. This temporary tax rate change would have no material impact on
the net deferred tax assets of the French tax group and, consequently, it has not been taken into account for the
measurement of deferred taxes.
Income tax risk provisions have been reviewed and adjusted as part of the regular tax risk provisioning process.
The increased difference between French and local tax rates in 2012 reflects the beneficial tax rate mix composition for the
Group and the increase of the pre-tax results compared to 2011.
The reduction of the tax-exempt income resulted from lower tax-exempt investment returns.
Due to the finalization of income tax returns and refinement of prior periods' income tax positions in 2011 and 2012,
particularly in Germany and France, prior year tax benefits were recognized.
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