Vodafone 2016 Annual Report Download - page 109

Overview Strategy review Performance Governance Financials Additional information
Vodafone Group Plc
Annual Report 2016
107
Deferred tax
Analysis of movements in the net deferred tax balance during the year:
£m
1 April 2015 23,250
Exchange movements 2,043
Charged to the income statement (continuing operations) (3,134)
Charged directly to OCI (218)
Charged directly to equity (2)
Reclassications 8
Arising on acquisition and disposals (11)
31 March 2016 21,936
Deferred tax assets and liabilities, before offset of balances within countries, are as follows:
Amount
(charged)/
credited
in income
statement
£m
Gross
deferred
tax asset
£m
Gross
deferred tax
liability
£m
Less
amounts
unrecognised1
£m
Net
recognised
deferred tax
(liability)/
asset
£m
Accelerated tax depreciation 243 1,264 (1,309) (37) (82)
Intangible assets 27 67 (1,610) 12 (1,531)
Tax losses (3,588) 26,929 –(4,828) 22,101
Deferred tax on overseas earnings (14) –(53) –(53)
Other temporary differences 198 1,818 (98) (219) 1,501
31 March 2016 (3,134) 30,078 (3,070) (5,072) 21,936
Note:
1 Other unrecognised temporary differences include £141 million relating to Minimum Alternative Tax credits in India, of which £47 million expire within 0–5 years and £94 million expire within
6–10 years.
Deferred tax assets and liabilities are analysed in the statement of nancial position, after offset of balances within countries, as follows:
£m
Deferred tax asset 22,382
Deferred tax liability (446)
31 March 2016 21,936
At 31 March 2015, deferred tax assets and liabilities, before offset of balances within countries, were as follows:
Amount Net
credited/ recognised
(charged) Gross Gross Less deferred tax
in income deferred deferred tax amounts (liability)/
statement tax asset liability unrecognised asset
£m £m £m £m £m
Accelerated tax depreciation 382 1,183 (1,355) (61) (233)
Intangible assets 195 107 (1,704) 13 (1,584)
Tax losses 4,866 28,080 –(4,430) 23,650
Deferred tax on overseas earnings (38) –(40) –(40)
Other temporary differences 68 1,695 (94) (144) 1,457
31 March 2015 5,473 31,065 (3,193) (4,622) 23,250
At 31 March 2015 deferred tax assets and liabilities were analysed in the statement of nancial position, after offset of balances within countries,
as follows:
£m
Deferred tax asset 23,845
Deferred tax liability (595)
31 March 2015 23,250
Factors affecting the tax charge in future years
The Group’s future tax charge, and effective tax rate, could be affected by several factors including; tax reform in countries around the world,
including any arising from the implementation of the OECD’s BEPS actions and European Commission initiatives such as the proposed anti-tax
avoidance directive, tax and nancial reporting directive or as a consequence of state aid investigations, future corporate acquisitions and disposals,
any restructuring of our businesses and the resolution of open tax issues (see below).
The Group is routinely subject to audit by tax authorities in the territories in which it operates and, specically, in India these are usually resolved
through the Indian legal system. We consider each issue on its merits and, where appropriate, hold provisions in respect of the potential tax liability
that may arise. However, the amount ultimately paid may differ materially from the amount accrued and could therefore affect the Group’s overall
protability and cash ows in future periods. See note 30 “Contingent liabilities and legal proceedings” to the consolidated nancial statements.