H1 Taxes

12 Months Ended

Dec. 31, 2024

Major components of tax expense (income) [abstract]


		Taxes

The Company’s tax expense

was SEK –2,215 (–2,785) million or 85.6%

(–11.9

%) 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

2024

2023

2022

Current income taxes for the year

–6,461

–4,289

–7,353

Current income taxes related to prior years

–162

118

253

Deferred tax income/expense (+/–)

4,563

1,406

1,617

Share of taxes in associated companies

–102

–20

–14

Pillar Two tax expense

–53

–

Income tax expense

–2,215

–2,785

–5,497

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%, on the consolidated income/loss before taxes, is shown in the table below.

The tax rate is negatively impacted by the effect on non-tax deductible goodwill and the remeasurement of tax loss carry-forwards and positively impacted by the other intangible asset impairments mainly related to Vonage of SEK 15.1 (31.9) billion. In 2022 taxes were positively impacted by SEK 411 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

2024

2023

2022

Calculated tax expense at Swedish tax rate of 20.6%

–533

4,804

–5,070

Effect of foreign tax rates

430

–884

–605

Current income taxes related to prior years

–162

118

253

Remeasurement of tax loss carry-forwards

–973

–28

–49

Remeasurement of deductible temporary differences

308

394

Withholding tax expense

–780

–217

–

Recognition of previously expensed withholding tax

–

411

Tax effect of non-deductible expenses

–1,045

–7,311

–760

Tax effect of non-taxable income

655

335

327

Tax effect of changes in tax rates

–62

–19

Pillar Two tax expense

–53

–

Income tax expense

–2,215

–2,785

–5,497

Effective tax rate

85.6%

–11.9%

22.3%

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.

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 effect of the IAS 12 amendments on deferred tax arising from a single transaction effective January 1, 2023.

Tax effects of temporary differences and tax loss carry-forwards


	Deferred tax assets		Deferred tax liabilities		Net balance

2024
Intangible assets and property, plant and equipment		1,447		3,457
Right-of-use assets and similar assets		–		1,199
Current assets		4,340		1,323
Post-employment benefits		4,778		229
Provisions		4,788		–
Lease liabilities and similar liabilities		1,307		–
Deferred tax credits		5,027		–
Other		2,394		359
Loss carry-forwards		5,603		–
Deferred tax assets/liabilities		29,684		6,567		23,117
Netting of assets/liabilities		–5,272		–5,272
Deferred tax assets/liabilities, net		24,412		1,295		23,117

2023
Intangible assets and property, plant and equipment		1,195		7,193
Right-of-use assets and similar assets		–		1,272
Current assets		3,413		1,313
Post-employment benefits		5,297		477
Provisions		3,980		–
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 assets/liabilities, net		22,375		3,880		18,495

Changes in deferred taxes, net


	2024		2023
Opening balance, net		18,495		14,610
Recognized in net income		4,563		1,406
Recognized in other comprehensive income		505		–631
Balances regarding acquired/divested busines s es		–		–57
Deferred tax credits increase (+) / utilization (–)		–685		3,249
Translation difference		239		–82
Closing balance, net		23,117		18,495

Tax on items charged to Equity and Other comprehensive income

2024

2023

2022

Remeasurements of defined benefits pension plans

–147

–251

–2,093

Revaluation of credit risk on borrowings

117

137

–212

Cash flow hedge reserve

652

–380

–671

Non-controlling interests

–

–4

Total

624

–494

–2,980

Tax on items charged to Equity and Other comprehensive income (OCI) is presented in the table above. Of the total tax effect reported in OCI, SEK 507 (–631) million is deferred tax and SEK 117 (137) 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 and associates.

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 pertain to Sweden, US, Germany and Brazil. These countries have long or indefinite periods of utilization. Of the total SEK 5,603 (6,158) million recognized deferred tax assets related to tax loss carry-forwards, SEK 3,815 (4,172) million relates to Sweden.

Future profit projections support the conclusion that the deferred tax assets will be utilized in the foreseeable future.

As of December 31, 2024, the recognized tax loss carry-forwards amounted to SEK 25,354 (27,666) million. The tax value of the tax loss carry-forwards is reported as a tax asset based on the utilization periods and the expectation that the

roup will realize a significant taxable income to offset these loss carry-forwards. The tax loss carry-forwards of SEK 11,025 (8,918) million at a tax value of SEK 2,399 (1,819) 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, Ireland, Hungary and the UK. 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
2025		58		10		136		19
2026		2		1		160		26
2027		10		2		1,331		327
2028		59		15		450		107
2029		300		85		118		16
2030 or later (also includes unlimited carry-forwards)		24,925		5,490		9,052		1,960
Total		25,354		5,603		11,247		2,455

Deferred tax credits

In addition to deferred tax credits of SEK 5,027

(5,453

) million recognized in 2024, 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 1,114 (1,148) 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
2025		32		108
2026		121		122
2027		33		105
2028		1,376		9
2029		2,132		10
2030 or later		1,333		760
Total		5,027		1,114