Nokia 2014 Annual Report Download - page 155

153
Financial statements
NOKIA IN 2014
13. Income tax
EURm 2014 2013 2012
Continuing operations
Income tax benet/(expense)
Current tax (374) (354) (329)
Deferred tax 1 782 152 25
Total 1 408 (202) (304)
Finnish entities 1 840 (87) (147)
Entities in other countries (432) (115) (157)
Total 1 408 (202) (304)
Reconciliation of the dierence between income tax computed at the statutory rate in Finland of 20% (24.5% in 2013 and 2012) and income
tax recognized in the consolidated income statement is as follows:
EURm 2014 2013 2012
Income tax benet/(expense) atstatutory rate 47 (60) 289
Permanent dierences (23) 22 (67)
Non-tax deductible impairment ofgoodwill(1) (242) – –
Income taxes for prior years (18) 22 78
Income taxes on foreign subsidiaries’ prots in (excess of)/lower than
income taxes at statutory rates (35) (5) (15)
Eect of deferred taxassets not recognized(2) (373) (138) (609)
Benet arising from previously unrecognized tax losses, tax credits
and temporary dierences(3) 2 081 – –
Net decrease/(increase) in uncertain tax positions 5(14) 14
Change in income tax rates (1) (7) (4)
Income taxes on undistributed earnings 521 24
Other (38) (43) (14)
Total income tax benet/(expense) 1 408 (202) (304)
Tax (charged)/credited to equity (7) 6 3
(1) Relates to HERE’s goodwill impairment charge. Refer to Note 10, Impairment.
(2) In 2014, relates primarily to HERE’s Dutch tax losses and temporary dierences for which deferred tax was not recognized. In 2013 and 2012, relates primarily to Nokia Networks’ Finnish and German
unrecognized deferred tax on tax losses, unused tax credits and temporary dierences accordingly.
(3) Relates primarily to the Group’s Finnish tax losses, unused tax credits and temporary dierences for which deferred tax was recognized. Refer to Note 14, Deferred taxes.
Current income tax liabilities include EUR 387 million (EUR 394 million in 2013) related to uncertain tax positions with inherently uncertain timing
of cash outows.
Prior period income tax returns for certain Group companies are under examination by local tax authorities. The Group’s business and
investments, especially in emerging market countries, may be subject to uncertainties, including unfavorable or unpredictable tax treatment.
Management judgment and a degree of estimation are required in determining the tax expense or benet. Even though management does not
expect that any signicant additional taxes in excess of those already provided for will arise as a result of these examinations, the outcome or
actual cost of settlement may vary materially from estimates.
In 2013, the India Tax Authority commenced an investigation into withholding tax in respect of payments by Nokia India Private Limited to Nokia
Corporation for the supply of operating software. Subsequently, the authorities extended the investigation to other related tax consequences
and issued orders and made certain assessments. The litigation and assessment proceedings are pending. Nokia has denied all such allegations
and continues defending itself in various Indian litigation proceedings and under both Indian and international law, while extending its full
cooperation to the authorities.