O A Notes to the Consolidated Financial Statements (continued) - - 12.2 Deferred tax assets and liabilities - - - - - Introduction Report of the Executive Board Report of the Supervisory Board 2018 2017 Income tax using the Company's domestic tax rate 25.0 660 25.0 708 Effect of tax rates in foreign jurisdictions 0.2 5 0.6 17 Effect of non-deductible expenses 2.6 69 2.6 75 Effect of tax incentives and exempt income (3.2) (84) (3.4) (98) De-recognition/(recognition) of deferred tax assets 0.4 11 Effect of unrecognised current year losses 3.4 89 1.7 49 Effect of changes in tax rates (0.1) (3) (1.6) (45) Withholding taxes 3.2 84 2.3 65 Under/(over) provided in prior years (1.4) (37) (0.5) (14) Other reconciling items (1.0) (26) (0.4) (13) 28.7 757 26.7 755 The 2018 effective tax rate is negatively impacted by non-deductible impairments, while 2017 included a one-off tax benefit as a result of the US tax reform. For the income tax impact on items recognised in other comprehensive income, please refer to note 12.3. Financial Statements Sustainability Review Heineken N.V. Annual Report 2018^10 Other Information Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following items: Assets Liabilities Net In millions of 2018 2017 2018 2017 2018 2017 P,P&E 92 72 (502) (521) (410) (449) Intangible assets 29 41 (1,267) (1,333) (1,238) (1,292) Investments 44 54 (5) (6) 39 48 Inventories 40 31 (10) (9) 30 22 Borrowings 11 32 (28) 11 4 Post-retirement obligations 231 300 (6) (6) 225 294 Provisions 146 131 (27) (30) 119 101 Other items 457 467 (376) (382) 81 85 Tax losses carried forward 395 460 395 460 Tax assets/(liabilities) 1,445 1,588 (2,193) (2,315) (748) (727) Set-off of tax (823) (820) 823 820 Net tax assets/(liabilities) 622 768 (1,370) (1,495) (748) (727) Of the total net deferred tax assets of €622 million as at 31 December 2018 (2017: €768 million), €225 million (2017: €253 million) is recognised in respect of subsidiaries in various countries where there have been losses in the current or preceding period. Management's projections support the assumption that it is probable that the results of future operations will generate sufficient taxable income to utilise these deferred tax assets. This judgement is performed annually and based on budgets and business plans for the coming years, including planned commercial initiatives. No deferred tax liability has been recognised in respect of undistributed earnings of subsidiaries, joint ventures and associates, with an impact of €80 million (2017: €75 million). This because HEINEKEN is able to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future. Tax losses carried forward HEINEKEN has tax losses carried forward of €3,494 million as at 31 December 2018 (2017: €3,593 million), out of which €356 million (2017: €137 million) expires in the following five years. €228 million (2017: €434 million) will expire after five years and €2,911 million (2017: €3,023 million) can be carried forward indefinitely Deferred tax assets have not been recognised in respect of tax losses carried forward of €1,664 million (2017: €1,619 million) as it is not probable that taxable profit will be available to offset these losses. €103 million (2017: €78 million) expires in the following five years. €40 million (2017: €57 million) will expire after five years and €1,521 million (2017: €1,484 million) can be carried forward indefinitely.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 106