6. Income taxes
EUR million
2022
2021
Income taxes for the financial period Income taxes from previous periods
-36.4
-48.6
Accounting principles Tax expenses in the income statement consist of taxes based on the taxable income for the period, taxes for previous periods, and deferred tax assets and liabilities. The tax effect related to the items recorded in the comprehensive income statement is recognised in the comprehensive income statement. Taxes based on the taxable income for the period are calculated based on taxable income in accordance with the tax rate as it stands in each country at that time. Deferred tax assets and liabilities are calculated on the temporary differences between the carrying amount and the tax base in accordance with the tax rates enacted as at the balance sheet date. No deferred taxes are recognised for non-deductible goodwill, and no deferred taxes are recognised for subsidiaries’ undistrib- uted profits to the extent that the difference will not likely realise in the predictable future. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which a deductible temporary difference can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes are related to the same taxation authority. The most significant temporary differences arise from depre- ciation of property, plant and equipment; the measurement of other investments and derivatives contracts at fair value; defined benefit plans; unused tax losses; and measurement at fair value in conjunction with acquisitions of business operations. Key estimates and judgement The management’s judgement is required for determining the taxes based on the result for the period, deferred tax assets and liabilities, and the extent to which deferred tax assets are recorded. The Group is subject to income taxation in several countries, and the final amount of tax is uncertain for several business operations and calculations. The Group anticipates future tax audits and recognises liabilities based on estimates of whether further taxes will need to be paid. If the associated final tax differs from the originally recorded amounts, the difference has an effect on both the taxes based on the taxable income for the period, and on deferred tax receivables and liabilities.
-0.5
-3.2 -0.1
Deferred taxes
-26.7 -63.5
Income taxes total
-51.8
Income tax reconciliation
EUR million
2022 524.9 -105.0
2021
Result before tax
365.8 -73.2
Calculated tax at Finnish statutory rate of 20.0% Effects of differences between Finnish and non-Finnish tax rates
-2.4
-1.0
Tax exempt income
4.9
1.4
Non-deductible expenses
-0.4
-0.2
Restatement of deferred taxes recognised for temporary differences and tax losses in previous years
0.0
0.5
Use of unrecognised tax losses
1.1
Share of result from associate companies and joint ventures Income taxes from previous periods
32.6
22.9
-0.5
-3.2 -0.1
Other
7.2
Income taxes total
-63.5
-51.8
Effective tax rate, %
12.1
14.2
Taxes for the current period include a 7.1 million euros of tax support to be applied for in the 2022 taxation of the investments of the Swedish subsidiary. Income taxes from previous periods include EUR 2.3 million in taxes recorded on the basis of a tax audit of an Italian subsidiary. Taxes reported in other comprehensive income are specified in Note 5.1.
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Consolidated financial statements | METSÄ BOARD ANNUAL AND SUSTAINABILITY REPORT 2022
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