Income tax expense
In 2008 and 2007, pre-tax income was SEK 30,317 million and SEK 21,259 million, respectively. Income tax expense was distributed as follows.
|
|
January–December | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Tax items brought to income |
|
|
| Current tax expense relating to current year | 0 | -2,539 |
| Underprovided or overprovided current tax expense in prior years | 0 | 2 |
| Deferred tax expense originated or reversed in current year | -11 | 1,279 |
| Total tax expense brought to income | -11 | -1,258 |
| Tax items recognized directly in shareholders' equity |
|
|
| Deferred tax income (+)/expense (-) | 87 | -14 |
| Total tax income (+)/expense (-) recognized directly in shareholders' equity | 87 | -14 |
The difference between the nominal Swedish income tax rate and the effective tax rate comprises the following components.
|
|
January–December | |
|---|---|---|
| Percent | 2008 | 2007 |
| Swedish income tax rate | 28.0 | 28.0 |
| Underprovided or overprovided current tax expense in prior years | 0.0 | 0.0 |
| Effect on deferred tax expense from change in tax rate | 0.0 | – |
| Non-deductible expenses | 0.3 | 0.4 |
| Tax-exempt income | -28.3 | -22.5 |
| Effective tax rate as per the income statement | 0.0 | 5.9 |
| Tax recognized directly in shareholders' equity | -0.3 | 0.1 |
| Effective tax rate | -0.3 | 6.0 |
In 2008, tax-exempt income mainly refers to an asset transfer to the subsidiary TeliaSonera Skanova Access AB (Skanova Access), made at market value in exchange for new shares issued by Skanova Access. From a fiscal point of view, however, the assets were transferred at tax book value and the consideration was treated as tax-exempt income in TeliaSonera AB. In 2007, tax-exempt income primarily referred to dividends from subsidiaries and associated companies. In December 2008, the Swedish parliament passed changes to the tax legislation, including, among others, a reduction of the Swedish corporate income tax rate from 28 percent to 26.3 percent effective January 1, 2009. This triggered a recalculation of existing deferred tax assets, resulting in a net deferred tax expense of SEK 15 million in 2008.
Income tax assets and liabilities
Deferred tax assets and liabilities changed as follows.
|
|
December 31, | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Deferred tax assets |
|
|
| Carrying value, opening balance | 235 | 307 |
| Income statement period change | -11 | -58 |
| Recognized in shareholders' equity | 87 | -14 |
| Carrying value, closing balance | 311 | 235 |
| Deferred tax liabilities |
|
|
| Carrying value, opening balance | – | 1,337 |
| Income statement period change | – | -1,337 |
| Carrying value, closing balance | – | – |
Temporary differences in deferred tax assets and liabilities were as follows.
|
|
December 31, | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Deferred tax assets |
|
|
| Fair value adjustments for other financial assets | 87 | 0 |
| Delayed expenses for provisions | 224 | 235 |
| Total deferred tax assets | 311 | 235 |
| Total deferred tax liabilities | – | – |
| Net deferred tax assets | 311 | 235 |
In 2008 and 2007, there were no accumulated non-expiring tax loss carry-forwards or unrecognized deferred tax assets. The unrecognized deferred tax liability in untaxed reserves amounted to SEK 2,110 million in 2008 and SEK 5,617 million in 2007.
Untaxed reserves, appropriations and group contributions
Untaxed reserves in the balance sheet were distributed as follows.
|
|
December 31, | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Profit equalization reserves | 5,625 | 7,281 |
| Accumulated excess amortization and depreciation | 2,399 | 12,780 |
| Total | 8,024 | 20,061 |
Excess amortization and depreciation changed as follows.
|
|
December 31, | |||
|---|---|---|---|---|
|
|
2008 | 2007 | ||
| SEK in millions | Intangible assets | Plant and machinery | Intangible assets | Plant and machinery |
| Opening balance | 108 | 12,672 | 134 | 13,083 |
| Reversals | 35 | -10,416 | -26 | -411 |
| Closing balance | 143 | 2,256 | 108 | 12,672 |
Appropriations brought to income were as follows.
|
|
January–December | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Change in profit equalization reserves | 1,656 | -3,022 |
| Change in accumulated excess amortization and depreciation | 10,381 | 437 |
| Net effect on income | 12,037 | -2,585 |
Under certain conditions, it is possible to transfer profits through group contributions between Swedish companies in a group. Group contributions provided are normally a deductible expense for the contributor and taxable in-come for the recipient. Group contributions were as follows.
|
|
January–December | |
|---|---|---|
| SEK in millions | 2008 | 2007 |
| Pre-tax group contributions, net received (recognized in income) | 1,031 | 2,991 |