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H1 Taxes | 12 Months Ended
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Dec. 31, 2023
Major components of tax expense (income) [abstract] |
H1 Taxes |
|  | Taxes
The Company’s tax expense for 2023 was SEK –2,785 (–5,497) million or –11.9% (22.3%) of income after financial items. The tax rate may vary between years depending on business and geographical mix.
Income taxes recognized in the income statement |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current income taxes for the year |  |  | –4,289 |  |  |  | –7,353 |  |  |  | –6,110 |
Current income taxes related to prior years |  |  | 118 |  |  |  | 253 |  |  |  | –337 |
Deferred tax income/expense (+/–) |  |  | 1,406 |  |  |  | 1,617 |  |  |  | 188 |
Share of taxes in joint ventures and associated companies |  |  | –20 |  |  |  | –14 |  |  |  | –11 |
Income tax expense |  |  | –2,785 |  |  |  | –5,497 |  |  |  | –6,270 |
A reconciliation between reported tax expense for the year and the theoretical tax expense that would arise when applying the statutory tax rate in Sweden, 20.6% (20.6% in 2022, 20.6% in 2021), on the consolidated income before taxes, is shown in the table below. In 2023 the tax rate is negatively impacted by the effect on the non-tax deductible goodwill impairment related to Vonage of SEK 31.9 billion. In 2022 taxes were positively impacted by SEK 411 (969 in 2021) million as a result of utilization of previously expensed withholding tax assets in Sweden and negatively impacted by the tax effect of the provision for the Department of Justice (DOJ) settlement of SEK 450 million.
Reconciliation of Swedish income tax rate with effective tax rate |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Calculated tax expense at Swedish tax rate of 20.6% |  |  | 4,804 |  |  |  | –5,070 |  |  |  | –6,025 |
Effect of foreign tax rates |  |  | –884 |  |  |  | –605 |  |  |  | –324 |
Current income taxes related to prior years |  |  | 118 |  |  |  | 253 |  |  |  | –337 |
Remeasurement of tax loss carry-forwards |  |  | –28 |  |  |  | –49 |  |  |  | –175 |
Remeasurement of deductible temporary differences |  |  | 394 |  |  |  | 15 |  |  |  | 220 |
Withholding tax expense |  |  | –217 |  |  |  | – |  |  |  | – |
Recognition of previously expensed withholding tax |  |  | – |  |  |  | 411 |  |  |  | 969 |
Tax effect of non-deductible expenses |  |  | –7,311 |  |  |  | –760 |  |  |  | –975 |
Tax effect of non-taxable income |  |  | 335 |  |  |  | 327 |  |  |  | 392 |
Tax effect of changes in tax rates |  |  | 4 |  |  |  | –19 |  |  |  | –15 |
Income tax expense |  |  | –2,785 |  |  |  | –5,497 |  |  |  | –6,270 |
Effective tax rate |  |  | –11.9% |  |  |  | 22.3% |  |  |  | 21.4% |
Deferred tax balances Deferred tax assets and liabilities are derived from the balance sheet items as shown in the table below. The table includes the IAS 12 amendments on deferred tax arising from a single transaction effective January 1, 2023 and the comparables have been updated accordingly.
Tax effects of temporary differences and tax loss carry-forwards |
|  | Deferred tax assets |  |  | Deferred tax liabilities |  |  | Net balance |
2023 |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets and property, plant and equipment |  |  | 1,195 |  |  |  | 7,193 |  |  |  |  |
RoU lease assets and similar assets |  |  | – |  |  |  | 1,272 |  |  |  |  |
Current assets |  |  | 3,413 |  |  |  | 1,313 |  |  |  |  |
Post-employment benefits |  |  | 5,297 |  |  |  | 477 |  |  |  |  |
Provisions |  |  | 3,980 |  |  |  | – |  |  |  |  |
RoU lease liabilities and similar liabilities |  |  | 1,337 |  |  |  | – |  |  |  |  |
Deferred tax credits |  |  | 5,453 |  |  |  | – |  |  |  |  |
Other |  |  | 2,095 |  |  |  | 178 |  |  |  |  |
Loss carry-forwards |  |  | 6,158 |  |  |  | – |  |  |  |  |
Deferred tax assets/liabilities |  |  | 28,928 |  |  |  | 10,433 |  |  |  | 18,495 |
Netting of assets/liabilities |  |  | –6,553 |  |  |  | –6,553 |  |  |  |  |
Deferred tax balances, net |  |  | 22,375 |  |  |  | 3,880 |  |  |  | 18,495 |
2022 |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets and property, plant and equipment |  |  | 1,098 |  |  |  | 8,136 |  |  |  |  |
RoU lease assets and similar assets |  |  | – |  |  |  | 1,311 |  |  |  |  |
Current assets |  |  | 3,605 |  |  |  | 1,055 |  |  |  |  |
Post-employment benefits |  |  | 5,558 |  |  |  | 571 |  |  |  |  |
Provisions |  |  | 5,215 |  |  |  | – |  |  |  |  |
RoU lease liabilities and similar liabilities |  |  | 1,394 |  |  |  | – |  |  |  |  |
Deferred tax credits |  |  | 2,081 |  |  |  | – |  |  |  |  |
Other |  |  | 1,837 |  |  |  | 295 |  |  |  |  |
Loss carry-forwards |  |  | 5,190 |  |  |  | – |  |  |  |  |
Deferred tax assets/liabilities |  |  | 25,978 |  |  |  | 11,368 |  |  |  | 14,610 |
Netting of assets/liabilities |  |  | –6,584 |  |  |  | –6,584 |  |  |  |  |
Deferred tax balances, net |  |  | 19,394 |  |  |  | 4, 784 |  |  |  | 14,610 |
Changes in deferred taxes, net |  |  |  |  |  |  |  |
|  | 2023 |  |  | 2022 |
Opening balance, net |  |  | 14,610 |  |  |  | 22,225 |
Recognized in net income |  |  | 1,406 |  |  |  | 1,617 |
Recognized in other comprehensive income |  |  | –631 |  |  |  | –2,099 |
Balances regarding acquired/divested businesses |  |  | –57 |  |  |  | –3,911 |
Deferred tax credits increase (+) / utilization (–) |  |  | 3,249 |  |  |  | –3,586 |
Translation difference |  |  | –82 |  |  |  | 364 |
Closing balance, net |  |  | 18,495 |  |  |  | 14,610 |
Total tax reported in other comprehensive income (OCI) amounted to SEK –494 (–2,980) million, of which actuarial gains and losses related to pensions constituted SEK –251 (–2,093) million, revaluation of borrowings SEK 137 (–212) million, cash flow hedges SEK –380 (–671) million and non-controlling interests SEK 0 (–4) million. Of the total tax effect reported in OCI, SEK –631 (–2,099) million is deferred tax and SEK 137 (–881) million is current tax. As a result of parent company exemptions from tax on dividends from subsidiaries and on capital gains on disposal, there are no significant taxable temporary differences associated with investments in subsidiaries, branches, associates and joint ventures. Tax loss carry-forwards Significant tax assets regarding tax loss carry-forwards are reported to the extent that realization of the related tax benefit through future taxable profits is probable also when considering the period during which these can be utilized, as described below. The majority of the recognized tax loss carry-forwards pertains to Sweden, US , Brazil and Mexico. These countries have long or indefinite periods of utilization. Of the total SEK 6,158 (5,190) million recognized deferred tax assets related to tax loss carry-forwards, SEK 4,172 (3,508) million relates to Sweden. Future income projections support the conclusion that the deferred tax assets will be utilized in the foreseeable future. As of December 31, 2023, the recognized tax loss carry-forwards amounted to SEK 27,666 (23,438) million. The tax value of the tax loss carry-forward is reported as a tax asset based on the utilization period and the expectation that the group will realize a significant taxable income to offset these loss carry-forwards. Tax loss carry-forwards of SEK 8,918 (8,490) million at a tax value of SEK 1,819 (1,777) million have not been recognized due to judgments that they are unlikely to be utilizable against future taxable profits in the respective jurisdictions. The majority of both recognized and unrecognized tax loss carry-forwards have an expiration date in excess of five years. The majority of unrecognized tax loss carry-forwards pertains to US, UK and Ireland. The final years which the recognized and unrecognized tax loss carry-forwards can be utilized are shown in the following table.
Tax loss carry-forwards |
|  | Recognized tax loss |  |  |  |  |  | Unrecognized tax loss |
Year of expiration |  | Tax loss carry-forwards |  |  | Tax value |  |  |  |  |  | Tax loss carry-forwards |  |  | Tax value |
2024 |  |  | 15 |  |  |  | 3 |  |  |  |  |  |  |  | 159 |  |  |  | 20 |
2025 |  |  | 16 |  |  |  | 3 |  |  |  |  |  |  |  | 153 |  |  |  | 20 |
2026 |  |  | 124 |  |  |  | 31 |  |  |  |  |  |  |  | 151 |  |  |  | 25 |
2027 |  |  | 1,101 |  |  |  | 281 |  |  |  |  |  |  |  | 92 |  |  |  | 10 |
2028 |  |  | 1,688 |  |  |  | 373 |  |  |  |  |  |  |  | 100 |  |  |  | 13 |
2029 or later (also includes unlimited carry-forwards) |  |  | 24,722 |  |  |  | 5,467 |  |  |  |  |  |  |  | 8,263 |  |  |  | 1,731 |
Total |  |  | 27,666 |  |  |  | 6,158 |  |  |  |  |  |  |  | 8,918 |  |  |  | 1,819 |
Deferred tax credits In addition to deferred tax credits of SEK 5,453 (2,081) million recognized in 2023, unused deferred tax credits, relating mainly to R&D tax credits, for which no deferred tax asset was recognized in the consolidated balance sheet amounted to SEK 1,148 (1,296) million. The final years in which the tax credits can be utilized are shown in the below table. Risk assessment on the business plans is carried out on a regular basis, and deferred tax asset recoverability analysis will be performed if conditions suggest that such assets might need to be impaired.
Deferred tax credits |
|  | Recognized deferred tax credits |  |  | Unrecognized deferred tax credits |
Year of expiration |  | Tax Value |  |  | Tax Value |
2024 |  |  | 99 |  |  |  | 135 |
2025 |  |  | 938 |  |  |  | 108 |
2026 |  |  | 46 |  |  |  | 125 |
2027 |  |  | 1,778 |  |  |  | 133 |
2028 |  |  | 1,521 |  |  |  | 8 |
2029 or later |  |  | 1,071 |  |  |  | 639 |
Total |  |  | 5,453 |  |  |  | 1,148 |
The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about any deferred tax assets or liabilities related to Pillar Two income taxes. See also note A1 “Material accounting policies” for more information.

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