XML 46 R26.htm IDEA: XBRL DOCUMENT
v3.19.1

Note 19 - Tax assets and Liabilities | 12 Months Ended
--- | ---
Dec. 31, 2018
Disclosure Of Tax Assets And Liabilties Abstract |
Disclosure Of Tax Assets And Liabiltiies Explanatory | 19. Tax assets and liabilities 19.1 Consolidated tax group Pursuant to current legislation, the BBVA Consolidated Tax Group includes the Bank (as the parent company) and its Spanish subsidiaries that meet the requirements provided for under Spanish legislation regulating the taxation regime for the consolidated profit of corporate groups. The Group’s non-Spanish other banks and subsidiaries file tax returns in accordance with the tax legislation in force in eac h country. 19.2 Years open for review by the tax authorities The years open to review in the BBVA Consolidated Tax Group as of December 31, 2018 are 2014 and subsequent years for the main taxes applicable. The remainder of the Spanish consolidated entitie s in general have the last four years open for inspection by the tax authorities for the main taxes applicable, except for those in which there has been an interruption of the limitation period due to the start of an inspection. In the year 2017 as a conse quence of the tax authorities examination reviews, inspections were initiated through the year 2013 inclusive, and all such years closed with acceptance during the year 2017. Therefore, these inspections did not constitute any material amount to record in the Consolidated Annual accounts as their impact was provisioned. In view of the varying interpretations that can be made of some applicable tax legislation, the outcome of the tax inspections of the open years that may be conducted by the tax authorities in the future may give rise to contingent tax liabilities which cannot be reasonably estimated at the present time. However, the Group considers that the possibility of these contingent liabilities becoming actual liabilities is remote and, in any case, th e tax charge which might arise therefore would not materially affect the Group’s accompanying consolidated financial statements. 19.3 Reconciliation The reconciliation of the Group’s corporate income tax expense resulting from the application of the Span ish corporation income tax rate and the income tax expense recognized in the accompanying consolidated income statements is as follows:
Reconciliation of Taxation at the Spanish Corporation Tax Rate to the Tax Expense Recorded for the Period (Millions of euros)
| 2018 | 2017 | 2016
| Amount | Effective Tax % | Amount | Effective Tax % | Amount | Effective Tax %
Profit or (-) loss before tax | 8,446 |  | 6,931 |  | 6,392 |
From continuing operations | 8,446 |  | 6,931 |  | 6,392 |
Taxation at Spanish corporation tax rate 30% | 2,534 |  | 2,079 |  | 1,918 |
Lower effective tax rate from foreign entities (*) | (234) |  | (307) |  | (298) |
Mexico | (78) | 28% | (100) | 27% | (105) | 26%
Chile | (18) | 21% | (29) | 21% | (27) | 17%
Colombia | 10 | 33% | (3) | 29% | 22 | 36%
Peru | (12) | 28% | (16) | 27% | (18) | 26%
Turkey | (132) | 20% | (182) | 21% | (176) | 21%
Others | (4) |  | 23 |  | 6 |
Revenues with lower tax rate (dividends/capital gains) | (57) |  | (53) |  | (69) |
Equity accounted earnings | 3 |  | (2) |  | (11) |
Other effects | 49 |  | 452 |  | 159 |
Current income tax | 2,295 |  | 2,169 |  | 1,699 |
Of which: |  |  |  |  |  |
Continuing operations | 2,295 |  | 2,169 |  | 1,699 |
(*) Calculated by applying the difference between the tax rate in force in Spain and the one applied to the Group’s earnin gs in each jurisdiction. The effective income tax rate for the Group in the years ended December 31, 2018, 2017 and 2016 is as follows:
Effective Tax Rate (Millions of euros)
|  | 2018 | 2017 | 2016
Income from: |  |  |  |
Consolidated Tax Group |  | 1,482 | (678) | (483)
Other Spanish Entities |  | 33 | 29 | 52
Foreign Entities |  | 6,931 | 7,580 | 6,823
Total |  | 8,446 | 6,931 | 6,392
Income tax and other taxes |  | 2,295 | 2,169 | 1,699
Effective Tax Rate |  | 27.17% | 31.3% | 26.6%
In the year 2018, the changes in the nominal tax rate on corporate income tax, in comparison with those existing in the previous year, in the main countries in which the Group has a presence, have been in United States (federal tax from 35% to 21%), Turkey (from 20% to 22%), Argentina (f rom 35% to 30%), Chile (from 25.5% to 27%) and Colombia (from 40% to 37%). In the year 2017, the changes in the nominal tax rate on corporate income tax, in comparison with those existing in the previous period, in the main countries in which the Group has a presence, have been in Chile (f rom 24.0% to 25.5%) and Peru (f rom 28.0% to 29.5%). 19.4 Income tax recognized in equity In addition to the income tax expense recognized in the accompanying consolidated income statements, the Group has recognized the following income tax charges for t hese items in the consolidated total equity:
Tax recognized in total equity (Millions of euros)
|  | 2018 | 2017 | 2016
Charges to total equity |  |  |  |
Debt securities and others |  | (87) | (355) | (533)
Equity instruments |  | (56) | (74) | (2)
Subtotal |  | (143) | (429) | (535)
Total |  | (143) | (429) | (535)
19.5 Current and deferred taxes The balance under the heading "Tax assets" in the accompanying consolidated balance sheets includes current and deferred tax assets. The balance under the “Tax liabilities” heading includes the Group’s various current and deferred tax liabilities. The details of the mentioned tax assets and liabilities are as follows:
Tax assets and liabilities (Millions of euros)
|  | 2018 | 2017 | 2016
Tax assets |  |  |  |
Current tax assets |  | 2,784 | 2,163 | 1,853
Deferred tax assets |  | 15,316 | 14,725 | 16,391
Pensions |  | 405 | 395 | 1,190
Financial Instruments |  | 1,401 | 1,453 | 1,371
Other assets (investments in subsidiaries) |  | 302 | 357 | 662
Impairment losses |  | 1,375 | 1,005 | 1,390
Other |  | 990 | 870 | 1,236
Secured tax assets (*) |  | 9,363 | 9,433 | 9,431
Tax losses |  | 1,480 | 1,212 | 1,111
Total |  | 18,100 | 16,888 | 18,245
Tax Liabilities |  |  |  |
Current tax liabilities |  | 1,230 | 1,114 | 1,276
Deferred tax liabilities |  | 2,046 | 2,184 | 3,392
Financial Instruments |  | 1,136 | 1,427 | 1,794
Charge for income tax and other taxes |  | 910 | 757 | 1,598
Total |  | 3,276 | 3,298 | 4,668
(*) Law guaranteeing the deferred tax assets has been approved in Spain in 2013. In years 2016 and 2017 guaranteed deferred tax assets also existed in Portugal but in year 2018 they lost the guarantee due to the merge between BBVA Portugal S.A. and BBVA, S.A. At the end of year 2018, a tax reform has taken place in Col ombia, which is expected to hold a 37% tax rate for financial institutions in 2019 (prior to the reform, a 33% tax rate was planned). The most significant variations of the deferred assets and liabilities in the years 2018, 2017 and 2016 derived from the f ollowings causes:
Deferred tax assets and liabilities (Millions of euros)
|  | 2018 | 2017 | 2016
|  | Deferred Assets | Deferred Liabilities | Deferred Assets | Deferred Liabilities | Deferred Assets | Deferred Liabilities
Balance at the beginning |  | 14,725 | 2,184 | 16,391 | 3,392 | 15,878 | 3,418
Pensions |  | 10 | - | (795) | - | 168 | -
Financials Instruments |  | (52) | (291) | 82 | (367) | (103) | (113)
Other assets |  | (55) | - | (305) | - | 108 | -
Impairment losses |  | 370 | - | (385) | - | 44 | -
Others |  | 120 | 153 | (366) | (841) | 255 | -
Guaranteed Tax assets |  | (70) | - | 2 | - | (105) | -
Tax Losses |  | 268 | - | 101 | - | 146 | -
Charge for income tax and other taxes |  | - | - | - | - | - | 87
Balance at the end |  | 15,316 | 2,046 | 14,725 | 2,184 | 16,391 | 3,392
With respect to the changes in assets and liabilities due to deferred tax contained in the above table, the following should be pointed out: The decrease in guaranteed tax assets is motivated because those corresponding to Portugal are no longer considered as guaranteed. The increase in tax losses is mainly due to the Corporate Income Tax (CIT) return 2017 that has generated differences with respect to the estimate of Corporate Tax reflected in the financial statements, on the other hand, the increase in tax losses is also due to the generation of negative tax bases and deductions during year 2018. The evolution of the deferred tax assets and liabilities (without taking into consideration the guaranteed defer red tax asset and the tax losses) in net terms is a decrease of €531 million mainly due to the first implementation of IFRS9, the variations in the valuation of portfolio securities and to the operation of the corporate income tax in which differences betw een accounting and taxation produce movements in the deferred taxes. On the deferred tax assets and liabilities contained in the table above, those included in section 19.4 above have been recognized against the entity's equity, and the rest against earnin gs for the year or reserves. As of December 31, 2018, 2017 and 2016, the estimated amount of temporary differences associated with investments in subsidiaries, joint ventures and associates, which were not recognized deferred tax liabilities in the accompanying consolidated balance sheets, amounted to 443 million euros, 376 million euros and 874 million euros, respectively. Of the deferred tax assets contained in the above table, the detail of the items and amounts guaranteed by the Spanish governmen t, broken down by the items that originated those assets is as follows:
Secured tax assets (Millions of euros)
|  | 2018 | 2017 (*) | 2016 (*)
Pensions |  | 1,874 | 1,897 | 1,901
Impairment losses |  | 7,489 | 7,536 | 7,530
Total |  | 9,363 | 9,433 | 9,431
(*) In 2017 and 2016 guaranteed deferred tax assets also existed in Portugal but in 2018 they lost the guarantee. As of December 31, 2018, non-guaranteed net deferred tax assets of the above table amounted to €3,907 million (€3,108 and €3,568 million as of December 31, 2017 and 2016 respectively), which broken down by m ajor geographies is as follows: Spain: Net deferred tax assets recognized in Spain totaled €2,653 million as of December 31, 2018 (€2,052 and €2,007 million as of December 31, 2017 and 2016, respectively). €1,462 million of the figure recorded in the year ended December 31, 2018 for net deferred tax assets related to tax credits and tax loss carry forwards and €1,191 million relate to temporary differences. Mexico: Net deferred tax assets recognized in Mexico amounted to €826 million as of December 31, 2018 (€615 and €698 million as of December 31, 2017 and 2016, respectively). 99.97% of deferred tax assets as of December 31, 2018 relate to temporary differences. The remainders are tax credits carry forwards. South America: Net deferred tax assets recognized in South America amounted to €383 thousand as of December 31, 2018 (€26 and €362 million as of December 31, 2017 and 2016, respectively). Practically all the deferred tax assets are related to temporary differences, only 1.03% are related to tax credits. The United States: Net deferred tax assets recognized in The United States amounted to €164 million as of December 31, 2018 (€180 and €345 million as of December 31, 2017 and 2016, respectively). All the deferred tax assets relate to temporary differences. Turkey: Net deferred tax assets recognized in Turkey amounted to €250 million as of Decembe r 31, 2018 (€224 and €135 million as of December 31, 2017 and 2016 respectively). As of December 31, 2018, all the deferred tax assets correspond to €15 million of tax credits related to tax losses carry forwards and deductions and €235 million relate to t emporary differences. Based on the information available as of December 31, 2018, including historical levels of benefits and projected results available to the Group for the coming years, it is considered that sufficient taxable income will be generated f or the recovery of above mentioned unsecured deferred tax assets when they become deductible according to the tax laws. On the other hand, the Group has not recognized certain deductible temporary differences, negative tax bases and deductions for which, i n general, there is no legal period for offsetting, amounting to approximately € 2,236 million, which are mainly originated by Catalunya Banc.

X
- References No definition available. + Details
Name: | bbva_Disclosureoftaxassetsandliabiltiesabstract
Namespace Prefix: | bbva_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Text Block which displays the disclusure of tax assets and liabilities + References No definition available. + Details
Name: | bbva_Disclosureoftaxassetsandliabiltiiesexplanatory
Namespace Prefix: | bbva_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration