5.1 Income tax in the consolidated statement of profit or loss
in PLN millions, unless otherwise stated
Accounting policies
Income tax recognised in profit or loss comprises current income tax and deferred income tax.
Current income tax is calculated in accordance with current tax laws.
On 6 October 2021, an agreement to extend the functioning of Tax Group “PGK KGHM II” by another three tax years, that is from 2022 to 2024, was signed. It is the second Tax Group founded within the KGHM Polska Miedź S.A. Group. The “PGK KGHM I” Tax Group operated in the years 2016-2018. Real benefits were noted in the period of operation of the first PGK KGHM, including the possibility of current utilisation of losses generated by some of the companies within PGK to settle them with the profits of other companies, and the positive result of an analysis of companies of the Group with respect to meeting the criteria indicated in the act on corporate income tax were a basis to found a new tax group – PGK KGHM II.
PGK KGHM II is comprised of:
- KGHM Polska Miedź S.A.
- Energetyka sp. z o.o.
- Zagłębie Lubin S.A.
- Miedziowe Centrum Zdrowia S.A.
- KGHM CUPRUM sp. z o.o. – Centrum Badawczo-Rozwojowe
- INOVA Centrum Innowacji Technicznych sp. z o.o.
- PeBeKa S.A.
- KGHM ZANAM S.A.
- POL-MIEDŹ TRANS Sp. z o.o.
- Mercus Logistyka sp. z o.o.
- KGHM Metraco S.A.
- Spółki celowe: Future 1 Sp. z o.o., Future 3 Sp. z o.o., Future 4 Sp. z o.o., Future 5 Sp. z o.o.
- KGHM Centrum Analityki Sp. z o.o.
- Centrum Badań Jakości Sp. z o.o.
- BIPROMET S.A.
Income tax
| from 1 January 2022 to 31 December 2022 | from 1 January 2021 to 31 December 2021 | ||
| Current income tax | 1 369 | 1 564 | |
| Note 5.1.1 | Deferred income tax | 315 | 124 |
| Tax adjustments for prior periods | 31 | (19) | |
| Income tax | 1 715 | 1 669 |
In 2022, Group entities paid income tax in the amount of PLN 1 696 million (in 2021: PLN 740 million) to the appropriate tax offices.
The table below presents differences between income tax from profit before income tax for the Group and the income tax which could be achieved if the Parent Entity’s tax rate was applied:
| from 1 January 2022 to 31 December 2022 |
from 1 January 2021 to 31 December 2021 |
|
| Profit before income tax | 6 489 | 7 824 |
| Tax calculated using the Parent Entity’s rate (2022: 19%, 2021: 19%) |
1 233 | 1 487 |
| Effect of applying other tax rates abroad | (26) | 118 |
| Tax effect of non-taxable income | (6) | (19) |
| Tax effect of expenses not deductible for tax purposes, including: | 713 | 798 |
| the minerals extraction tax, which is not deductible for corporate income tax purposes | 600 | 674 |
| Deductible temporary differences in respect of which tax assets were not recognised | 2 | 10 |
| Utilisation in the period of previously-unrecognised tax losses | (287) | (590) |
| Adjustments of current income tax for prior periods | 31 | (19) |
| Tax losses and tax credits in the period from which there was no recognition of deferred tax assets | 160 | 5 |
| Deferred tax on eliminated interest on intra-Group loans | (81) | (92) |
| Other | (24) | (29) |
| Income tax in profit or loss [the effective tax rate amounted to 26.4% of profit before income tax (in 2021: 21.3% of profit before income tax)] |
1 715 | 1 669 |
In Poland, tax bodies are empowered to audit tax declarations for a period of five years, although during this period companies may offset tax assets with tax liabilities being the income of the State Treasury (including due to current income tax). In Canada, tax declarations may be audited for a period of three years without the right to offset assets with liabilities due to current income tax.