Chrysler 2013 Annual Report Download - page 161

160 Consolidated
Financial Statements
at 31 December 2013
Notes
The reconciliation between the theoretical income taxes calculated on the basis of the theoretical tax rate in effect in Italy for IRES (equal to
27.5%) and the income taxes recognized is as follows:
(€ million) 2013 2012
Theoretical income taxes 277 418
Tax effect on:
Recognition and utilization of previously unrecognized deferred tax assets (1,747) (529)
Permanent differences 8(79)
Deferred tax assets not recognized and write-downs 380 473
Differences between foreign tax rates and the theoretical Italian tax rate and tax holidays 119 164
Taxes relating to prior years 20 8
Other differences (66) 88
Total Tax (income)/expenses, excluding IRAP (1,009) 543
Effective tax rate -35.7%
IRAP (current and deferred) 66 80
Total Tax (income)/expenses (943) 623
Since IRAP taxable basis differs from income before taxes, it is excluded in the above reconciliation.
In 2013, the Group’s effective tax rate is not representative because the Group recognized a net tax benefit in relation to a Consolidated
Net profit. In particular, in 2013, the theoretical income taxes and the Group’s actual differ primarily due to the recognition of previously
unrecognized deferred tax assets related to Chrysler for €1,500 million. Excluding this effect, the theoretical tax rate of the Group in 2013
would have been 48.7%. The difference is also affected by other effects arising from the utilization of tax losses carried forward for which
deferred tax assets were not recognized in the past. These benefits were partially offset by the negative impact of €380 million euro (€473
million in 2012) arising from the unrecognized deferred tax assets on temporary differences and tax losses arising in the year.
In 2013 Other differences include unrecoverable withholding tax of €84 million (€95 million in 2012).
The Group recognizes in its Statement of Financial Position within Deferred tax asset, the amount of Deferred tax assets less the Deferred tax
liabilities of the individual consolidated companies, where these may be offset. Amounts recognized are as follows:
(€ million) At 31 December 2013 At 31 December 2012
Deferred tax assets 2,893 1,738
Deferred tax liabilities (278) (801)
Total 2,615 937