10. Income tax
|
(in millions of euros) |
2025 |
2024 |
|
Reconciliation with the effective tax rate |
||
|
Result before tax from continuing operations |
432 |
-118 |
|
Tax on profit according to Dutch corporate income tax rate (25.8%) |
-111 |
30 |
|
Addition of mixed costs, investment deduction, etc. |
- |
- |
|
Change in valuation of deferred tax assets |
57 |
-37 |
|
Permanent difference: Untaxed results of restructuring and settlement in Germany |
- |
3 |
|
Other effects |
- |
-2 |
|
Total income tax |
-54 |
-6 |
Corporate income tax is calculated on the basis of the applicable tax rates in the Netherlands, taking into account the tax provisions that result in permanent differences between the commercial and tax results. The tax provisions include, among other things, the participation exemption and the limitation of deductible expenses.
In the Netherlands, Pillar 2 legislation is in force. Pillar 2 is part of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and aims to ensure a minimum level of taxation for multinational companies worldwide. This regulation is intended to combat tax avoidance by ensuring that large international companies pay a minimum effective tax rate on their global profits, regardless of where they operate. The legislation will take effect from the Group's 2024 financial year.
The Group has made an assessment of its potential exposure to second pillar taxes. This assessment is based on the most recent information available on the financial performance of the constituent entities in the Group. Based on the assessment carried out, NS will make use of the temporary 'safe harbor' arrangement in the countries where it operates. The safe harbor arrangement offers temporary simplifications and guidelines to help companies comply with the new international minimum taxes, which may reduce administrative burdens.
Based on this assessment, no second pillar tax will be applied in 2024 and 2025.
The effective tax rate on the result from continuing operations for corporate income tax purposes is 12.6% (2024: -5%). The deviation from the nominal tax rate is mainly due to the revaluation of deferred tax assets.
For the Dutch fiscal unity, there is agreement with the Tax and Customs Administration on the tax returns up to and including 2021. A final assessment has been received for 2021, but not yet for the following years. In the financial statements for previous years and for this year, tax has been recognised on the basis of the returns filed up to and including 2024 and the assumptions used therein and any corrections to previous years.
Accounting policy
Tax on the profit or loss for the reporting period comprises the current and deferred income taxes payable and deductible for the reporting period. Income tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity through other comprehensive income, in which case the tax is recognised in equity through other comprehensive income.
The tax payable and creditable for the financial year is the expected tax payable on the taxable profit for the reporting period, calculated using tax rates applicable at the balance sheet date and adjustments to tax payable for previous years.
Almost all subsidiaries belonging to the Group are included in the NS fiscal unity for corporate income tax purposes, with the exception of foreign group entities.