Sberbank - Annual Report 2010 - 27 Income Taxes

Home Financial Report Financial Statements Notes 27 Income Taxes

# 27 Income Taxes

Income tax expense comprises the following:

In millions of Russian Roubles | 2010 | 2009
--- | --- | ---
Current tax | 50,622 | 17,559
Deferred tax | 4,062 | (8,207)
Less: Deferred tax recognised in other comprehensive income | (6,197) | (3,884)
Income tax expense for the year | 48,487 | 5,468

The income tax rate applicable to the major part of the Group’s income for 2010 is 20% (2009: 20%).

Reconciliation between the expected and the actual taxation charge is provided below:

In millions of Russian Roubles | 2010 | 2009
--- | --- | ---
IFRS profit before tax | 230,135 | 29,864
Theoretical tax charge at statutory rate (2010: 20%; 2009: 20%) | 46,027 | 5,973
Tax effect on income on government securities taxed at different rates | (2,367) | (1,497)
Tax effect of items which are not deductible or assessable for taxation purposes: |  |
- Non-deductible staff costs | 790 | 235
- Unrecognised tax asset of subsidiaries | 1,300 | -
- Non-deductible losses on cessions | 1,184 | -
- Other non-temporary differences | 1,553 | 757
Income tax expense for the year | 48,487 | 5,468

Differences between IFRS and Russian statutory taxation regulations give rise to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their tax bases. The tax effect of the movements in these temporary differences is detailed below and is recorded at the rate of 20% (2009: 20%), except for income on state, municipal and certain other types of securities that is taxed at 15%, 9% and 0% (2009:15%, 9% and 0%) and on dividends that is taxed at a standard rate of 9% (2009: 9%).

In millions of Russian Roubles | 31 December 2009 | Business combinations | Credited/ (charged) to profit or loss | Recognised in other comprehensive income | 31 December 2010
--- | --- | --- | --- | --- | ---
Tax effect of deductible temporary differences |  |  |  |  |
Deferred fees and commissions income | 6,298 | - | (547) | - | 5,751
Accrued employee benefit costs | 2,446 |  | (2,406) | - | 40
Low value items write-off | 1,163 | - | 167 | - | 1,330
Accrued interest on loans | 3,978 | - | 2,660 | - | 6,638
Fair valuation of trading securities and securities designated at fair value through profit or loss | (2,980) | - | 7,143 | - | 4,163
Gross deferred tax asset | 10,905 | - | 7,017 | - | 17,922
Tax effect of taxable temporary differences |  |  |  |  |
Loan impairment provision | 3,361 | - | (464) | - | 2,897
Premises and equipment | 15,611 | 335 | 1,943 | (39) | 17,850
Fair valuation of investment securities available for sale | (1,869) |  | 1,154 | 6,236 | 5,521
Other | (1,600) | (592) | 2,249 | - | 57
Gross deferred tax liability | 15,503 | (257) | 4,882 | 6,197 | 26,325
Total net deferred tax asset/(liability) | (4,598) | 257 | 2,135 | (6,197) | (8,403)

In millions of Russian Roubles | 31 December 2008 | Business combinations | Credited/ (charged) to profit or loss | Recognised in other comprehensive income | 31 December 2009
--- | --- | --- | --- | --- | ---
Tax effect of deductible temporary differences |  |  |  |  |
Deferred fees and commissions income | 5,782 | - | 516 | - | 6,298
Accrued employee benefit costs | 2,164 |  | 282 | - | 2,446
Low value items write-off | 1,131 | - | 32 | - | 1,163
Accrued interest on loans | - | - | 3,978 | - | 3,978
Fair valuation of investment securities available for sale | 9,550 |  | 460 | (8,141) | 1,869
Other | 397 | (316) | 1,519 | - | 1,600
Gross deferred tax asset | 19,024 | (316) | 6,787 | (8,141) | 17,354
Tax effect of taxable temporary differences |  |  |  |  |
Loan impairment provision | 6,493 | - | (3,132) | - | 3,361
Premises and equipment | 20,277 | 1,973 | (2,382) | (4,257) | 15,611
Fair valuation of trading securities and securities designated at fair value through profit or loss | 2,770 | - | 210 | - | 2,980
Gross deferred tax liability | 29,540 | 1,973 | (5,304) | (4,257) | 21,952
Total net deferred tax asset/(liability) | (10,516) | (2,289) | 12,091 | (3,884) | (4,598)

As at 31 December 2010, the temporary difference associated with investments in subsidiaries in the statement of financial position of the parent company amounted to RR 27 037 million (2009: RR 8 602 million). In accordance with IAS 12 Income taxesrespective deferred tax asset of RR 5 407 million (2009: respective deferred tax liability of RR 1 720 million) was not recognized in the financial statements.

## History

- 13 Investment Securities Held to Maturity
- 12 Investment Securities Available for Sale
- 11 Securities Pledged under Repurchase Agreements
- 10 Loans and Advances to Customers
- 9 Securities Designated at Fair Value through Profit or Loss

## My Annual Report

- Store Page
- Show Saved Pages (22)

## Tools

- Quick Analyser
- Download Center

### Key figures

- Operating Income
- Assets
- Net Profit