Current tax (previous year adjustments)
Tax charge (income)
Reconciliation of result before taxes and tax charge
Result before taxes
Applicable tax charge at average statutory tax rate
Income not subject to tax
Expenses not deductible for tax purposes
Effect of the reversal of tax assets
Changes in tax rates
Tax charge (income)
Average tax rate on operations
The average statutory tax rate is the average of the statutory tax rates in the countries where Corbion operates, weighted on the basis of the result before taxes in each of these countries. The difference between these rates for 2019 (14.1%) and 2018 (25.6%) is caused by the 2019 impairment related to Brazil as this is a high-tax country (34% corporate tax rate).
The partial release of the contingent liability which was recorded as a result of the impairment resulted in income not subject to tax under the provisions of the participation exemption (impact € -3.7 million).
Expense not deductible for tax purposes consists of negative results of participations which are non-deductible under the participation exemption (impact € 1.6 million) as well as the effect of non-deductible costs in multiple jurisdictions (impact € 1.5 million).
The effective tax rate is impacted significantly by the impairment in Brazil as no deferred tax asset has been recognized for the resulting deductible temporary difference (impact € 12.0 million). In addition, minimal deferred tax asset has been recognized for the tax losses incurred in 2019 in Brazil (impact € 2.1 million).
The impact of currency effects (€ 1.6 million) is caused by reporting entities which have a tax reporting currency which deviates from their functional currency. Other effects include adjustments in respect of current year events and the impact of changes to relevant regulations, facts, or other factors compared to those used in establishing the current tax position or deferred tax balance in previous years (impact € -0.6 million).
The realization of deferred tax assets depends on the expected future profitability. Deferred tax assets are not recognized if it is not probable that a tax benefit can be realized.
Breakdown of the tax charge recognized in equity
Tax liability due to loan-related exchange rate differences
Tax liability due to hedge results of financial instruments
Tax charge due to remeasurement of defined benefit obligation
Tax charge (income) recognized in equity