Volvo 2001 Annual Report Download - page 68

THE VOLVO GROUP · NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
64
Income after financial items was distributed as follows:
1999 2000 2001
Sweden 31,268 3,983 (4,062)
Outside Sweden 2,763 1,828 2,198
Share of income (loss) in associated companies 565 435 (2)
Total 34,596 6,246 (1,866)
Tax expense was distributed as follows:
1999 2000 2001
Current taxes:
Sweden (812) (755) (111)
Outside Sweden (651) (291) (503)
Subtotal (1,463) (1,046) (614)
Deferred taxes:
Sweden (480) 23 820
Outside Sweden (6) (243) 162
Subtotal (486) (220) 982
Associated companies (321) (244) (42)
Total taxes (2,270) (1,510) 326
Tax expense pertains to current as well as deferred tax in
Swedish and foreign companies.
Provision has been made for estimated tax charges
that may arise as a result of prior tax audits in the Volvo
Group. Tax claims for which no provision has been
deemed necessary of approximately 1,151 (2,071;
2,754) are included among contingent liabilities.
The gain on the sale of Volvo Cars in 1999 amounted
to SEK 26.7 billion. On November 25, 1999, Sweden’s
Supreme Administrative Court confirmed the preliminary
decision of the Tax Board that AB Volvo’s sale of Volvo
Cars did not result in a taxable capital gain.
Deferred taxes relate to estimated tax on the change
in tax-loss carryforwards and temporary differences.
1999, % 2000, % 2001, %
Swedish corporate income tax rates 28 28 28
Difference in tax rate in various countries 1 2 6
Capital gains (23) (2) 7
Utilization of tax-loss carryforwards 0 (2) 15
Losses for which no benefit has been recognized 1 0 (3)
Recognition of deferred tax assets – (3) (31)
Non-deductible expenses 0 2 (16)
Non-taxable income – (2) 28
Amortization of goodwill 1 2 (17)
Other, net (2) (3) 2
Tax rate for the Group, excluding equity method 62219
Equity method 1 2 (2)
Tax rate for the Group 72417
Deferred tax assets are reported to the extent that it is
probable that the amount can be utilized against future
taxable income.
At year-end 2001, the Group had tax-loss carry-
forwards of about 16,900, of which approximately 8,600
was recognized in calculating deferred taxes. Accordingly,
tax-loss carryforwards of about 8,300 may be utilized to
reduce tax expense in future years. Of the total tax-loss
carryforwards, about 3,300 expire within 5 years.
The Swedish corporate income tax rate is 28%. The
table below shows the principal reason for the difference
between this rate and the Group’s tax rate, based on
income after financial items.
Other financial income and expenses include exchange gains amounting to 59 (52; 372).
Note 9 Other financial income and expenses
Note 10 Taxes