Boskalis_Annual_Report_2016

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12. INCOME TAX EXPENSES The tax charge declined to EUR 32.4 million (2015: EUR 87.5 million). The effective tax rate, adjusted for impairment charges, was 11.1% (2015: 16.0%) and 17.0%, if adjusted for the net result from joint ventures and associates, the book profit on the KOTUG SMIT transaction, the book profit from the revaluation to fair value of our existing 50% share in VBMS and the book profit on the sale of SMIT Amandla Marine.

2015

2016

CURRENT INCOME TAX EXPENSES Current year

- 89,565

- 54,422 20,351

Over / under(-) provision regarding prior financial years

5,566 1,830

Reclassification of deferred income taxes regarding prior financial years

-

- 82,169

- 34,071

DEFERRED INCOME TAX EXPENSES Origination and reversal of temporary differences

1,819

- 3,685 - 1,830

Reclassification of deferred income taxes regarding prior financial years

-

Movement of recognized tax losses carried forward

232

- 108 1,711

- 5,283

- 87,452

- 32,360

TAXATION IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

The operational activities of the Group are subject to various tax regimes with tax rates ranging from 0.0% to 48.0% (2015: 0.0% to 40.5%). These different tax rates, non-deductible expenses, treatment of tax losses, special taxation regimes, adjustments in respect of prior years and results not subject to taxation, result in an effective tax rate in the reporting period of -6.1% (2015: 16.5%). The effective tax rate is calculated as tax charge divided by profit/loss before taxation, as shown in the consolidated statement of profit or loss. The reconciliation between the Dutch nominal income tax rate and the effective income tax rate is as follows:

2015

2016

Profit/Loss (-) before taxation

530,982 14,533 545,515

- 529,390 842,641 313,251

Impairment losses

Nominal tax rate in the Netherlands ANNUAL REPORT 2016 – BOSKALIS FINANCIAL STATEMENTS 2016 Weighted average tax rate Non-deductible expenses Prior year adjustments Effective income tax rate

Profit/Loss (-) before taxation, adjusted

- 136,379

25.0%

- 78,313

25.0%

Tonnage tax, withholding tax, other special tax regimes Different statutory taxes for other jurisdictions

36,931 20,645 - 78,803

- 6.8% - 3.8% 14.4%

18,423

- 5.9% - 1.0% 18.1%

2,981

- 56,909

Increase (decrease) in tax rate resulting from: Unrecognized income tax losses and temporary differences Recognition of previously unrecognized tax losses Tax exempted share in results of joint ventures and associated companies (excl. impairments) Tax exempted revaluation results and book results

- 10,959

2.0%

- 7,886

2.5%

4,594

- 0.8%

3,461

- 1.1%

9,177

- 1.7%

4,191

- 1.3% - 6.5%

- 87

0.0% 3.1%

20,433 - 18,515 20,351 - 34,874

- 16,941

5.9%

5,566

- 1.0% 16.0%

- 6.5% 11.1%

- 87,452

Tax benefit on impairments of group companies

-

0.5%

2,514

- 17.2%

- 87,452

16.5%

- 32,360

- 6.1%

Tax exempted revaluation results and book results mainly relate to the transfer of the European harbor towage activities into the KOTUG SMIT Towage joint venture (see note 5.3), the revaluation of the share in VBMS prior to business combination (see note 5.1) and the result on the sale of SMIT Amandla Marine (see note 5.4). In 2015 this related to the revaluation gain and impairment loss regarding the Group’s investment in Fugro N.V. 13. INCOME TAX RECEIVABLE AND PAYABLE The current income tax receivables and income tax payables relate to the tax positions of the respective Group companies and consist of financial years yet to be settled less withholding taxes or tax refunds.