25. Deferred taxes

Deferred corporate income tax assets and liabilities are created to reflect temporary differences between the carrying value of assets and liabilities in these financial statements and the value in the corporate income tax return. Deferred taxes are recognised at nominal value. The calculation is based on the tax rates expected to apply when the temporary differences are realised. The tax rates in question are those that apply on the reporting date or that already have been materially decided as at the balance sheet date.

A deferred corporate income tax asset is recognised on the balance sheet if and to the extent that sufficient taxable profits will likely be available. Offsetting deferred tax assets and liabilities only takes place if a formal right to offset exists and the company has the intention to settle the deferred taxes at the same time. The deferred tax liability is mainly of a long-term nature.

It is unclear whether the Pillar Two model rules will create additional temporary differences, whether it is necessary to recalculate the deferred taxes for the rules of the Pillar Two model, and which tax rate must be used to calculate deferred taxes. Therefore, IASB added a temporary obligatory exemption to IAS 12. Due to this exemption, no deferred tax assets or liabilities in connection with corporate income tax based on Pillar Two model rules have been taken into account or explained in the notes.

The deferred corporate income tax liability is mainly formed due to a lower tax valuation of property, plant and equipment. The differences in valuation originated from the start of the tax obligation (1998), a commercial revaluation (2009), and the possibility to apply the random depreciation method for tax purposes in the past and in the year 2023.  In addition, deferred tax liabilities were recognised for the impact of IFRS 16 (leases).

The increase in the deferred tax liability of € 47 million compared to 2022 is mainly attributable to applying the random depreciation method on investments in the grids in the year 2023.

The deferred tax liability can be specified as follows:

Tax deductible losses as from 2013 can statutorily be carried forward for an unlimited period of time. The deferred tax in connection with valued tax-deductible losses pertains to losses incurred by Mijnwater Warmte Infra B.V., before it joined the tax group, in the years 2017 up to and including 2019 (€ 2 million deferred tax receivable). Furthermore, this includes the share of the tax-deductible loss over 2023 of the Enexis Holding N.V. tax group that was not settled with the corporate income tax paid in 2022.

At year-end 2023, there we no unvalued future deductible tax losses.