Pandora_Annual_Report_2018

INCOME TAX EXPENSE (DKK million) 2018 2017 Current income tax charge for the year 1,195 1,205 Deferred tax change for the year -78 114 Adjustment to current tax for prior years 25 -9 Adjustment to deferred tax for prior years -25 7 Total income tax expense 1,117 1,317 Deferred tax on other comprehensive income 7 -4 Tax on other comprehensive income 7 -4 RECONCILIATION OF EFFECTIVE TAX RATE AND TAX % (DKK million) % (DKK million) Profit before tax 6,782 10,818 Corporate tax rate in Denmark, 22% 22.0% 1,492 22.0% 2,380 Non-taxable dividend income -6.1% -414 -11.6% -1,251 Other adjustments including adjustment to tax for prior years 0.5% 34 0.0% -5 Withholding taxes 0.1% 5 1.8% 193 Effective income tax rate/income tax expense 16.5% 1,117 12.2% 1,317 Accounting policies INCOME TAX Pandora A/S is taxed jointly with its Danish sub- sidiaries. These subsidiaries are included in the joint taxation from the date they are recognised in the consolidated financial statements and up to NOTE 2.4 Taxation the date on which they are no longer consolidat- ed. The jointly taxed Danish companies are taxed under the on-account tax scheme. Further information is provided in note 2.5 to the consolidated financial statements. (DKK million) 2018 2017 Wages and salaries 343 329 Pensions 25 22 Share-based payments -10 22 Social security costs 5 2 Other staff costs 37 95 Total staff costs 400 470 Staff costs have been recognised in the income statement: Sales, distribution and marketing expenses 133 143 Administrative expenses 267 327 Total staff costs 400 470 Average number of full-time employees during the year 448 386 Key management personnel at Pandora A/S represent the same persons as key management personnel of the Pandora Group. For informa- tion regarding compensation of key management personnel of Pandora A/S, see note 2.3 to the consolidated financial statements. The share option programme described in note 2.4 t o the consolidated financial statements is is- sued by Pandora A/S. The value of share options granted to employees in the Parent Company’s subsidiaries is recognised in investments in sub- sidiaries. As described in note 2.4 t o the consoli- NOTE 2.2 Staff costs NOTE 2.3 Share-based payments dated financial statements, the reversal of cost exceeds the recorded cost in the year and results in a total positive effect of DKK 31 million (2017: cost of DKK 66 million), of which DKK 21 million relates to subsidiaries (2017: DKK 44 million). P A N D O R A A N N U A L R E P O R T 2 0 1 8 C O N T E N T S P A R E N T C O M P A N Y 1 0 5