Taxes

3.9 Taxes

The company will pay its income taxes in accordance with the underlying tax rate, with no tax planning. Income taxes consist of direct taxes and the change in deferred tax: EUR -25.8 (-30.8) million and EUR -9.4 (5.0) million respectively. Fingrid’s effective tax rate is essentially comparable to Finland’s corporate tax rate (20% in 2016 and 2015). The only difference between the Finnish corporate tax rate and Fingrid’s effective tax rate is due to a minor amount of non-deductible items, amounting in 2016 to EUR 0.4 (-0.1) million. The table below illustrates the development of Fingrid’s effective tax rate. The impact of a change in the tax rate has been eliminated over the year in the 2013 figures.

Verot vuosina
10. DEFERRED TAX ASSETS AND LIABILITIES, € 1,000
Changes in deferred taxes in 2016:
Deferred tax assets 31 Dec 2015 Recorded in income statement at profit or loss Recorded in other comprehensive income 31 Dec 2016
Provisions 334 -37   296
Current financial receivables 3 9   12
Trade payables and other liabilities 6,336 -4,478   1,858
Derivative instruments 9,800 -4,365 -1,446 3,989
Other items 6   -6 0
Total 16,479 -8,872 -1,452 6,155
         
Deferred tax liabilities        
Accumulated depreciations difference -89,779     -89,779
Property, plant and equipment, tangible and intangible assets -24,896 -2,224   -27,120
Available-for-sale investments -33   13 -20
Other receivables -1,005 166   -840
Current financial receivables       0
Financial assets recognised in the income statement at fair value -39 -41   -79
Borrowings -3,259 927   -2,332
Derivative instruments -6,230 622   -5,608
Total -125,240 -551 13 -125,778
         
Changes in deferred taxes in 2015:
Deferred tax assets 31 Dec 2014 Recorded in income statement at profit or loss Recorded in other comprehensive income 31 Dec 2015
Provisions 337 -4   334
Current financial receivables 0 3   3
Trade payables and other liabilities 365 5,971   6,336
Borrowings 957 -957   0
Derivative instruments 8,995 2,252 -1,446 9,800
Other items 21 -19 4 6
Total 10,674 7,246 -1,442 16,479
         
Deferred tax liabilities
Accumulated depreciations difference -89,779     -89,779
Property, plant and equipment, tangible and intangible assets -22,726 -2,170   -24,896
Available-for-sale investments -25   -8 -33
Other receivables -1,229 224   -1,005
Financial assets recognised in the income statement at fair value -85 47   -39
Borrowings   -3,259   -3,259
Derivative instruments -9,204 2,974   -6,230
Total -123,048 -2,184 -8 -125,240

Accounting principles

Income taxes

Taxes presented in the consolidated income statement include the Group companies’ accrual taxes for the profit of the financial year, tax adjustments from previous financial years and changes in deferred taxes. Deferred taxes are recorded in accordance with Finland’s statutory corporate tax rate of 20%. Taxes are recognised in the income statement unless they are linked with other comprehensive income, in which case the tax is also recognised in other comprehensive income. Such items in the Group consist solely of available-for-sale investments, since hedge accounting for electricity derivatives was discontinued in 2014.

Deferred tax assets and liabilities are recognised on all temporary differences between the tax values of asset and liability items and their carrying amounts using the liability method. Deferred tax is recognised using tax rates valid up until the closing date. The deferred tax liabilities arising from the original recognition of goodwill will not be recognised, however. Deferred tax liabilities will also not be recognised if they are caused by the original recognition of the asset or liability and the item is not related to a merger and the transaction will not affect the accounting totals or the taxable revenue during its implementation. The deferred tax assets are shown as non-current receivables and deferred tax liabilities correspondingly as non-current liabilities.

The largest temporary differences result from the depreciation of property, plant and equipment and from financial instruments. No deferred tax is recognised on the undistributed profits of the foreign associated company, because receiving the dividend does not cause a tax impact by virtue of a Nordic tax agreement. The deferred tax asset from temporary differences is recognised up to an amount which can likely be utilised against future taxable income.