30 Deferred tax liabilities
Deferred tax liabilities were recognized net of the amounts of deferred tax assets which can be offset for €3,558 million (€3,630 million at December 31, 2012).
(€ million) |
Amount at December 31, 2012 |
Additions |
Deductions |
Currency translation differences |
Other changes |
Amount at December 31, 2013 |
|
6,740 |
1,120 |
(1,047) |
(504) |
414 |
6,723 |
Deferred tax assets and liabilities consisted of the following:
(€ million) |
December 31, 2012 |
December 31, 2013 |
Deferred tax liabilities |
10,370 |
10,281 |
Deferred tax assets available for offset |
(3,630) |
(3,558) |
|
6,740 |
6,723 |
Deferred tax assets not available for offset |
(5,027) |
(4,662) |
Net deferred tax liabilities |
1,713 |
2,061 |
Net deferred tax liabilities of €2,061 million (€1,713 million at December 31, 2012) included the recognition of the deferred tax effect against equity of: (i) the fair value evaluation of derivatives designated as cash flow hedge (deferred tax assets for €70 million); (ii) the revaluation of defined-benefit plans (deferred tax assets for €13 million); and (iii) the fair value evaluation of available-for-sale securities (deferred tax liabilities for €2 million).
The most significant temporary differences giving rise to net deferred tax liabilities are disclosed below:
(€ million) |
Carrying amount at December 31, 2012 |
Addi- |
Deduc- |
Currency translation differences |
Other changes |
Carrying amount at December 31, 2013 |
Deferred tax liabilities |
|
|
|
|
|
|
Accelerated tax depreciation |
7,406 |
736 |
(354) |
(371) |
194 |
7,611 |
Difference between the fair value and the carrying amount of assets acquired following business combinations |
1,161 |
157 |
(48) |
(63) |
93 |
1,300 |
Site restoration and abandonment (tangible assets) |
537 |
4 |
(166) |
(47) |
59 |
387 |
Application of the weighted average cost method in evaluation of inventories |
89 |
27 |
(5) |
|
|
111 |
Capitalized interest expense |
24 |
(3) |
(7) |
|
|
14 |
Other |
1,153 |
199 |
(467) |
(23) |
(4) |
858 |
|
10,370 |
1,120 |
(1,047) |
(504) |
342 |
10,281 |
Deferred tax assets, gross |
|
|
|
|
|
|
Carry-forward tax losses |
(1,107) |
(1,154) |
23 |
80 |
(188) |
(2,346) |
Site restoration and abandonment (provisions for contingencies) |
(2,153) |
(75) |
409 |
73 |
(150) |
(1,896) |
Accruals for impairment losses and provisions for contingencies |
(1,884) |
(572) |
730 |
3 |
23 |
(1,700) |
Non-deductible depreciation and amortization |
(2,018) |
(134) |
578 |
63 |
(110) |
(1,621) |
Non-deductible impairment losses |
(752) |
(642) |
161 |
|
43 |
(1,190) |
Unrealized intercompany profits |
(693) |
(5) |
93 |
2 |
135 |
(468) |
Other |
(1,677) |
(457) |
298 |
43 |
224 |
(1,569) |
|
(10,284) |
(3,039) |
2,292 |
264 |
(23) |
(10,790) |
Impairments of deferred tax assets |
1,627 |
969 |
|
(27) |
1 |
2,570 |
Deferred tax assets, net |
(8,657) |
(2,070) |
2,292 |
237 |
(22) |
(8,220) |
Net deferred tax liabilities |
1,713 |
(950) |
1,245 |
(267) |
320 |
2,061 |
Italian taxation law allows the carry-forward of tax losses indefinitely. Foreign taxation laws generally allow the carry-forward of tax losses over a period longer than five years, and in many cases, indefinitely. An average tax rate of 32.2% was applied to tax losses of Italian subsidiaries to determine the portion of the carry-forwards tax losses which will be used in future years to offset the expected taxable profit. This rate was determined considering the different statutory rates of taxes applicable to all Italian subsidiaries which are included in the consolidation statement for Italian fiscal purposes. The corresponding rate for foreign subsidiaries was 33.5%.
Carry-forward tax losses amounted to €7,379 million and can be used indefinitely for €6,124 million. Carry-forward tax losses regarded Italian companies for €3,652 million and foreign companies €3,727 million. Carry-forward tax losses amounted to €6,050 million which are likely to be utilized against future taxable profit and were in respect of Italian companies for €3,505 million and foreign subsidiaries for €2,545 million. Deferred tax assets recognized on these losses amounted to €1,128 million and €852 million, respectively.
