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Notes to the Consolidated Financial Statements
12. Tax
12.1 Income tax expense
1 1 Heineken N.V. Report of the Report of the Financial Sustainability Other
J- J- \J Annual Report 2020 Introduction Executive Board Supervisory Board Statements Review Information
Recognised in profit or loss
In millions of
2020
2019
Current tax expense
Current year
688
896
Under/(over) provided in prior years
15
27
703
923
Deferred tax expense
Origination and reversal of temporary differences, tax losses and tax credits
(438)
30
De-recognition/(recognition) of deferred tax assets
(2)
(33)
Effect of changes in tax rates
(13)
(1)
Under/(over) provided in prior years
(5)
(9)
(458)
(13)
Total income tax expense in profit or loss
245
910
Reconciliation of the effective tax rate
In millions of
2020
2019
Profit before income tax
157
3,284
Share of (profit)/loss of associates and joint ventures
31
(164)
Profit before income tax excluding share of profit/(loss) of associates
188
3,120
and joint ventures
2020
2019
Income tax using the Company's domestic tax rate
25.0
47
25.0
780
Effect of tax rates in foreign jurisdictions
(5.6)
(10)
0.7
21
Effect of non-deductible expenses
66.2
124
3.2
100
Effect of tax incentives and exempt income
(34.3)
(64)
(3.8)
(119)
De-recognition/(recognition) of deferred tax assets
(1.0)
(2)
(1.1)
(33)
Effect of unrecognised current year losses
67.9
128
2.8
87
Effect of changes in tax rates
(6.9)
(13)
(1)
Withholding taxes
26.2
49
2.1
67
Under/(over) provided in prior years
5.5
10
0.6
18
Other reconciling items
(12.7)
(24)
(0.3)
(10)
130.3
245
29.2
910
COVID-19 related impairment and operational losses for which no tax benefit could be recognised increased
the effective tax rate in 2020. Furthermore, the relative effect of permanent items increased significantly due
to the low profit before income tax.
For the income tax impact on items recognised in other comprehensive income, refer to note 12.3.
