Plastic Omnium - 2018 Registration Document

4 2018 CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements at December 31, 2018 www.plasticomnium.com PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 172 Income tax 4.8 Income tax recorded in the income statement 4.8.1 The income tax expense breaks down as follows: In thousands of euros 2018 2017 restated CURRENT TAXES ON CONTINUING ACTIVITIES (92,446) (98,603) Current income tax (expense)/income (87,209) (93,965) Tax (expense)/income on non-recurring items (5,237) (4,638) DEFERRED TAXES ON CONTINUING ACTIVITIES (20,550) 17,301 Deferred tax (expense)/income on timing differences arising or reversed during the period (18,179) 4,084 Effect of changes in tax rates or the introduction of new taxes (2,371) 13,217 INCOME TAX ON CONTINUING ACTIVITIES RECORDED IN THE CONSOLIDATED INCOME STATEMENT (112,996) (81,302) Income tax analysis – Tax proof 4.8.2 The analysis of the income tax expense reveals the following factors: In thousands of euros 2018 2017 restated Totals % (1) Totals % (1) Consolidated profit on continuing activities before tax and share of profit/(loss) of associates and joint ventures (A) 602,391 430,038 French standard tax rate (B) 34.43% 34.43% THEORETICAL TAX EXPENSE (C) = (A) X (-B) (207,403) (148,062) Difference between the theoretical tax expense and the current and deferred tax expense excluding tax assessed on net interim profit on continuing activities (D) 94,407 15.7% 66,760 15.5% Tax credits 33,582 5.6% 38,195 8.9% Permanent differences between accounting profits and taxable profits 74,562 12.4% (5,035) -1.2% Change in unrecognized deferred taxes (33,900) -5.6% 11,803 2.7% Impact on deferred tax of a tax rate change (2,371) -0.4% 13,217 3.1% Impact of differences in foreign tax rates 29,043 4.8% 13,807 3.2% Value-added tax contribution (6,401) -1.1% (7,128) -1.7% Other impacts (108) -0.02% 1,901 0.4% TOTAL CURRENT AND DEFERRED TAX EXPENSE ON CONTINUING ACTIVITIES (E) = (C) + (D) (112,996) (81,302) EFFECTIVE TAX RATE ON CONTINUING ACTIVITIES (-E)/(A) 18.8% 18.9% Percentage expressed in relation to the consolidated profit on continuing activities before tax and share of profit/(loss) of associates and joint ventures (C). (1) The Group’s effective tax rate is 18.8% in 2018 (18.9% in 2017). In 2018, the actual income tax expense is €113 million for a theoretical tax of €207 million, based on a tax rate of 34.43%. In 2017, the tax recognized is a charge of €81 million for a theoretical tax of €148 million, based on a tax rate of 34.43%. The difference between the tax recognized and the theoretical tax is mainly explained: for €34 million by using specific tax reductions or credits mainly in ● North America, Asia and France (€38 million at December 31, 2017); for €29 million in the impact of more favorable tax rates, mainly in Asia ● (China, Thailand), in the United-States and Europe (excluding France and Belgium) (€14 million at December 31, 2017); for -€34 million by the effect of losses or other assets generated in the ● year but not recognized, net of those previously not activated but used or recognized in the year (€12 million at December 31, 2017);