Note 11 Income taxes

Recognised tax totalled MSEK 1,413 (1,115), of which MSEK 247 (165) is current tax. Current tax is calculated based on a nominal tax rate of 21.4%, while deferred tax is based on the lower tax rate of 20.6% in effect in Sweden from 2021. Current tax is based on taxable income for the year, which is lower than the recognised earnings. This is mainly an effect of the possibility to use tax depreciation on buildings, to use direct tax deductions for certain property reconstructions, which are capitalised in the accounts, tax-free sales of properties and to utilise existing tax loss carry forwards. Deferred tax is a provision for future tax that will be paid when the properties are sold, and the depreciation for tax purposes and the capitalised investments deducted for tax purposes are reversed.

Swedish accounting legislation does not permit the recognition of properties at fair value in legal entities; that is why changes in value on properties only occur at Group level and thus do not affect taxation. Certain financial instruments, such as interest rate swaps, might be recorded at fair value at entity level. In Castellum’s case, the changes in value on such instruments are covered in the interest deduction limitation regulations introduced in Sweden during 2019.

Tax paid arises as a result of existing tax loss carry forwards being locked in and can thus not be utilised in the Group as a whole.

 

 

Basis 2020

 

Basis 2019

Tax calculation for the Group

 

Current tax

 

Deferred tax

 

Current tax

 

Deferred tax

Income from prop. mgmt

 

3,380

 

 

 

3,146

 

 

Non-deductible interest

 

174

 

 

 

190

 

 

Deductions for tax purposes

 

 

 

 

 

 

 

 

depreciation

 

–1,319

 

1,319

 

–1,166

 

1,166

reconstructions

 

–392

 

392

 

–658

 

658

Other tax adjustments

 

–439

 

165

 

–142

 

190

Taxable income from property management

 

1,404

 

1,876

 

1,370

 

2,014

Sales of properties

 

3

 

–181

 

 

–2,273

Change in values on properties

 

 

3,712

 

 

4,276

Change in values on derivatives

 

 

 

 

Taxable income before tax loss carry forwards

 

1,407

 

5,407

 

1,370

 

4,017

Tax loss carry forwards, opening balance

 

–854

 

854

 

–1,081

 

1,081

Previously uncapitalised tax loss carry forwards

 

 

 

–370

 

370

Tax loss carry forwards, closing balance

 

603

 

–603

 

854

 

–854

Taxable income

 

1,156

 

5,658

 

773

 

4,614

Tax in profit or loss

 

–247

 

–1,166

 

–165

 

–950

Tax loss carry forwards consist of prior years’ tax losses. The losses, which are not restricted in time, are used to offset future taxable profits. Remaining tax loss carry forwards are estimated at MSEK 603.Total tax may differ from nominal tax due to non-taxable/tax-deductible income/costs or as an effect of other tax adjustments. Total tax recognised by Castellum is less than nominal tax. The effective tax on income from property management, without consideration of tax loss carry forwards, can be calculated to 9%.

 

 

Group

 

Parent Company

Tax cost/income

 

2020

 

2019

 

2020

 

2019

Recognised income before tax

 

7,028

 

6,765

 

1,764

 

1,502

Tax according to current tax rate

 

–1,448

 

–1,394

 

–377

 

–309

Tax effects due to:

 

 

 

 

 

 

 

 

non-taxable dividend

 

 

 

401

 

297

non-deductible impairment, shares in Group companies

 

 

 

–14

 

–11

non-taxable reverse impairment, shares in Group companies

 

 

 

 

53

non-deductible interest/chg in value on derivatives

 

–61

 

–62

 

–28

 

–26

non-taxable sales, prop/Group companies

 

30

 

394

 

 

Other tax adjustments

 

66

 

–53

 

3

 

–2

Tax expense/income recognised

 

–1,413

 

–1,115

 

–15

 

2