Unilever 2015 Annual Report Download - page 113

6 TAXATION
6A. INCOME TAX
Income tax on the proft for the year comprses current and deferred tax Income tax s recognsed n the ncome statement except
to the extent that t relates to tems recognsed drectly n equty
urrent tax s the expected tax payable on the taxable ncome for the year, usng tax rates enacted or substantvely enacted at the
balance sheet date, and any adustments to tax payable n respect of prevous years
urrent tax n the consoldated ncome statement wll dffer from the ncome tax pad n the consoldated cash flow statement
prmarly because of deferred tax arsng on temporary dfferences and payment dates for ncome tax occurrng after the balance
sheet date
Tax charge n ncome statement
 mllon
2015
 mllon
2014
 mllon
2013
urrent tax
urrent year (1,992) (2,111) (2,320)
Over/(under) provded n pror years (57) 68 232
(2,049) (2,043) (2,088)
Deferred tax
Orgnaton and reversal of temporary dfferences 82 (112) 177
hanges n tax rates (13) 4 7
Recognton of prevously unrecognsed losses brought forward 19 20 53
88 (88) 237
(1,961) (2,131) (1,851)
The reconclaton between the computed weghted average rate of ncome tax expense, whch s generally applcable to Unlever
companes, andthe actual rate of taxaton charged s as follows
Reconclaton of effectve tax rate
%
2015
%
2014
%
2013
omputed rate of tax(a) 24 27 28
Dfferences due to
Incentve tax credts (5) (5) (4)
Wthholdng tax on dvdends 2 2 2
Expenses not deductble for tax purposes 2 1 2
Irrecoverable wthholdng tax 2 1 1
Income tax reserve adustments – current and pror year 2 1 (3)
Transfer to/from unrecognsed deferred tax assets 1 1 –
Effectve tax rate 28 28 26
(a) The computed tax rate used s the average of the standard rate of tax applcable n the countres n whch Unlever operates, weghted by the amount of proft
before taxaton generated n each of those countres For ths reason the rate may vary from year to year accordng to the mx of proft and related tax rates
6B. DEFERRED TAX
Deferred tax s recognsed usng the lablty method on taxable temporary dfferences between the tax base and the accountng base
of tems ncluded n the balance sheet of the roup ertan temporary dfferences are not provded for as follows
• goodwll not deductble for tax purposes
• the ntal recognton of assets or labltes that affect nether accountng nor taxable proft and
• dfferences relatng to nvestments n subsdares to the extent that t s probable that they wll not reverse n the foreseeable future
The amount of deferred tax provded s based on the expected manner of realsaton or settlement of the carryng amount of assets
and labltes, usng tax rates enacted, or substantvely enacted, at the year end
A deferred tax asset s recognsed only to the extent that t s probable that future taxable profts wll be avalable aganst whch
the asset can be utlsed Deferred tax assets are reduced to the extent that t s no longer probable that the related tax beneft wll be
realsed
106 Unilever Annual Report and Accounts 2015Financial statements
NOTES TO THE ONSOLIDATED FINANIAL STATEMENTS
UNILEVER ROUP ONTINUED