METSÄ BOARD Annual review 2024
6. Income taxes
Cash flow hedge maturities 2024
1–6 months
7–12 months
1–5 years
over 5 years
Hedged cash flow total
EUR million
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
EUR million
2024
2023
Interest rate derivatives, hedge accounting Currency rate derivatives, hedge accounting Currency derivatives, no hedge accounting Commodity derivatives, hedge accounting
50.0
50.0
Income taxes for the financial period Income taxes from previous periods
-4.6 -0.2 -7.3
-12.8
704.7 164.7
290.7
995.4 164.7
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 judgements 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.
-0.1 -6.4
14.0
14.0
28.0
Deferred taxes
Income taxes total
-12.0
-19.3
Strategy and financial targets
8
Value creation
Cash flow hedge maturities 2023
Income tax reconciliation
1–6 months
7–12 months
1–5 years
over 5 years
Hedged cash flow total
Financial development 10 Key figures 12
EUR million
Interest rate derivatives, hedge accounting Currency rate derivatives, hedge accounting Currency derivatives, no hedge accounting Commodity derivatives, hedge accounting
50.0
50.0 813.8
EUR million
2024
2023 120.9 -24.2
613.5
200.3
Result before tax
51.4
Report of the Board of Directors
79.9 14.7
79.9 29.5
Calculated tax at Finnish statutory rate of 20.0%
-10.3
20 20 37 70 89 96
• Sustainability statement
14.7
General information
Effects of differences between Finnish and non-Finnish tax rates
-0.7
-0.6
E – Environment
Tax exempt income
0.9
0.5
S – Social responsibility
Non-deductible expenses
-0.4
-0.2
Restatement of deferred taxes recognised for temporary differences and tax losses in previous years
G – Governance
0.4
-0.4
Annexes to the Sustainability statement
Use of unrecognised tax losses
0.3
0.7
Share of result from associate companies and joint ventures Income taxes from previous periods
-1.8
4.8
98 Consolidated financial statements 102 Notes to the consolidated financial statements 150 Parent company financial statements 153 Notes to the parent company financial statements 166 The Board’s proposal to the Annual General Meeting for the distribution of funds 167 Auditor’s Report 171 Sustainability statement assurance report 173 Shares and shareholders 177 Ten years in figures 178 Taxes 179 Production capacities 181 Calculation of key ratios and comparable performance measures Corporate governance 183 Corporate governance statement 190 • Board of Directors of Metsä Board 194 • Corporate Management Team of Metsä Board
-0.2 -0.4
-0.1 0.2
Other
Income taxes total
-12.0
-19.3
Effective tax rate, %
23.3
16.0
Taxes reported in other comprehensive income are specified in Note 5.1. Pillar II, prepared in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, concerns the global minimum taxation of international groups’ income. The change concerns a new supplementary tax for large groups, which aims to ensure at least a minimum level of taxation of 15% worldwide. If the combined effective tax rate of any of the group’s operating countries, calculated according to the rules on minimum taxation, is below 15%, a supplementary tax will be imposed, which will increase the effective tax rate to 15%. The change will apply to financial periods starting after 31 December 2023 in the country concerned. According to Metsä Group’s current assessment, the global minimum taxation under Pillar II will either have no effect at all or will not have a material impact on the taxes paid by the group.
196 Remuneration report 201 Investor relations and investor information
142
143
Consolidated financial statements | METSÄ BOARD ANNUAL REVIEW 2024
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