XXXIII. Income tax

The balance of € 34,448k (€ 40,244k in 2014) includes € 39,657k in current taxes (€ 35,523k the previous year) and € 7,414k in net deferred tax assets (€ 3,425k in 2014).

IRAP, which is charged on Italian operations and whose basis is essentially EBIT plus short-term personnel expense, went from € 6,297k in 2014 to € 382k due to a new law allowing the deduction of personnel expense for employees on open-ended contracts. The balance also includes the reversal of an accrual for the previous year in the amount of € 746k.

CVAE, charged on French operations and calculated on the basis of revenue and value added, amounted to € 1,823k (€ 1,849k in 2014).

Excluding IRAP and French CVAE, the average tax rate was 28.5%, compared with 41.6% in 2014.

Starting in 2017, the corporate income tax (IRES) rate for Italian companies will be reduced from 27.5% to 24% on the basis of the Stability Law (Law 208 of 28 December 2015). As a result, deferred taxes recognized at 31 December 2015 have been adjusted, leading to a positive impact of € 1,063k on the income statement and a decrease of € 1,262k in net equity.

Below is a reconciliation between the tax charge recognized in the consolidated financial statements and the theoretical tax charge. The latter was determined by applying the theoretical tax rate to the gross income earned in each jurisdiction.

 

(k)  2015%2014%
Theoretical income tax 48,511 42.9 34,427 44.6
Reduced tax due to the direct taxation of minority partners in fully consolidated US joint ventures (5,213)   (4,252)  
Net effect of unrecognised tax losses, of utilization of unrecognised prior-year tax losses and the revision of estimates on the taxability/deductibility of temporary differences 679   6,838  
Adjustment tax rate for Italian companies (IRES) (1,063)   -  
Tax concession on the labour cost in the United States (6,423)   (4,403)  
Other permanent differences (4,247)   (512)  
Income tax, excluding IRAP and CVAE 32,243 28.5 32,098 41.6
IRAP and CVAE 2,205   8,146  
Recognised income tax 34,448 30.5 40,244 52.1