8.2 Effective tax rate
The reconciliation of income tax on the gross financial result before tax at the statutory interest rate with income tax calculated according to the tax rate applicable to the Group is as follows:
|
|
Year ended 31 December 2023 |
Year ended 31 December 2022 |
| PROFIT/(LOSS) BEFORE TAX | (4,055) | 4,110 |
| Tax at statutory rate effective in Poland – 19% | (770) | 781 |
| ITEMS ADJUSTING INCOME TAX | ||
| Adjustments concerning current income tax expense from previous years | 20 | 7 |
| Adjustments to deferred income tax | 35 | (12) |
| Reversal of deferred tax asset and provision relating to the provision for the rehabilitation of final workings | 523 | – |
| Creation of non-fiscal provisions and write-downs | 565 | 151 |
| Non-deductible costs | 152 | 60 |
| Tax loss on which no tax asset was recognised | 438 | 25 |
| Reversal of non-fiscal provisions and write-downs | (14) | (183) |
| Non-taxable income | (66) | (126) |
| Other adjustments | (36) | 17 |
|
INCOME TAX EXPENSE AT EFFECTIVE TAX RATE Income tax (charge) in the consolidated financial statements |
847 | 720 |
| EFFECTIVE TAX RATE | (21)% | 18% |
In the current reporting year, the Group discontinued creating deferred tax assets on provisions due to the distant timing of the expenditure for which such provisions are intended and the worsening outlook for fossil fuel power generation. It is not certain whether conventional power companies will generate sufficient taxable income to achieve deferred tax assets. Deferred tax assets relating to the provision for the of final workings in the lignite mines and furnace waste disposal sites at the power plants and established in previous periods were reversed.
As described in note 7.3, in the comparative period, the subsidiary PGE GiEK S.A. charged a contractual penalty of PLN 562 million. The contractual penalty was subject to a write-down in the same amount. No deferred tax (PLN 107m) was recognised on the revenue or on the created write-down.