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NOTES
90 • Consolidated financial statements PANDORA ANNUAL REPORT 2016
SECTION 2: RESULTS FOR THE YEAR, CONTINUED
2.5 TAXATION
Income tax expense
DKK million 2016 2015
Current income tax charge 1,692 1,305
Adjustment concerning previous years1 17 486
Impact of change in tax rates 3 -5
Change in deferred tax -87 -115
Total income tax expense 1,625 1,671
Tax reconciliation
Profit before tax 7,650 5,345
Corporate tax rate in Denmark, 22% (2015: 23.5%) 1,683 1,256
Tax effect of:
Deviations in foreign subsidiaries’ tax rates compared with tax rate applicable for the Parent Company 77 34
Impact of change in tax rates 3 -5
Non-taxable income and non-deductible expenses -133 -80
Adjustment concerning previous years 17 486
Adjustments of deferred tax assets, net -22 -20
Total income tax expense 1,625 1,671
Effective income tax rate 21.2% 31.3%
Tax from other comprehensive income 10 -22
Deferred tax
DKK million 2016 2015
Deferred tax at 1 January 485 -23
Exchange rate adjustments 5 11
Change in deferred tax - recognised in income statement 105 411
Change in deferred tax - recognised in statement of other comprehensive income, hedging instruments -10 22
Change in deferred tax - recognised in statement of changes in equity, share-based payments -29 59
Impact of change in tax rates -3 5
Deferred tax at 31 December 553 485
Deferred tax assets 946 879
Deferred tax liabilities -393 -394
Deferred tax, net 553 485
Specification of deferred tax
Intangible assets -627 -615
Property, plant and equipment -25 31
Current assets 792 570
Non-current assets and liabilities 395 491
Tax loss carry-forwards 18 8
Deferred tax, net 553 485
Unrecognised share of tax loss carry-forwards 72 53
Latent tax liability on undistributed dividends2 254 244
1 The adjustment concerning previous years in 2015, DKK 486 million comprised DKK 364 million related to the settlement with the Danish tax authorities.
2 The latent tax liability on undistributed dividend relates to a 10% withholding tax on dividend, which will be payable if retained earnings earned before
1 September 2012 are distributed as dividend from PANDORA Production Co. Ltd. to PANDORA A/S. At present, Management does not intend to distribute
this dividend.