F.24. Income taxes
| In CZK million, for the year ended 31 December | 2016 | 2015 |
|---|---|---|
| Current income taxes | 775 | 694 |
of which: related to prior years | (125) | (1) |
| Deferred taxes | (37) | 60 |
| Total | 738 | 754 |
Reconciliation between expected and effective tax rates:
| In CZK million, for the year ended 31 December | 2016 | 2015 restated |
|---|---|---|
| Expected income tax rate | 19.00% | 19.00% |
| Earnings before taxes | 4,909 | 4,778 |
| Expected income tax expense | 934 | 1 133 |
| Expenses not allowable for tax purposes | 67 | 137 |
| Income not subject to tax | (147) | (335) |
| Other reconciliations | (116) | (181) |
| Tax expense | 738 | 754 |
| Effective tax rate | 15.03% | 15.78% |
The tax authority may at any time inspect the books and records of the Company within a maximum period of 10 years subsequent to the reported tax year, and may impose additional tax assessments and penalties. The Company’s management is not aware of any circumstances which may give rise to a potential material liability in this respect.
F.24.1. Deferred tax
| In CZK million,as at 31 December | Deferred tax Assets | Deferred tax Liabilities | ||
|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | |
| Intangible assets | – | – | (75) | (80) |
| Tangible assets and Land and buildings (self used) | – | – | (3) | (3) |
| Land and buildings (investment properties) | – | – | (1) | (6) |
| Available-for-sale financial assets | 4 | 4 | – | – |
| Financial liabilities and other liabilities | 38 | 23 | – | – |
| Other | 37 | 30 | – | (5) |
| Total | 79 | 57 | (79) | (94) |
| Net deferred tax receivable/liability | – | – | – | (37) |
The changes in deferred tax assets and liabilities were recognised through the income statement in the amount of CZK 37 million.
In accordance with the accounting method, the amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted as at the end of the reporting period which, for the year 2016 and following years is 19% (2016 – 19%).
F.24.2. Current tax and deferred tax recognised directly in equity
| In CZK million, for the year ended 31 December | 2016 | 2015 |
|---|---|---|
| Deferred tax - revaluation gain on financial assets at AFS | 4 | 4 |
| Current tax - unrealised gain/losses on financial assets at AFS | (1,376) | (1,189) |
| Total tax on revaluation on financial assets at AFS | (1,372) | (1,185) |
| Total | (1,372) | (1,185) |
Details on tax on revaluation on financial assets at AFS securities are included in note F.9.