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Deferred tax assets and liabilities
 12 Months Ended
Dec. 31, 2018
Disclosure of Deferred Tax [Abstract]  
Disclosure of deferred taxes [text block]
22 
Deferred tax assets and liabilities
 
(€ million)
 
December 31, 2018 
 
December 31, 2017  
Deferred tax liabilities, gross
 
 
7,956
 
 
 
10,169
 
Deferred tax assets available for offset
 
 
(3,684)
 
 
 
(4,269
)
Deferred tax liabilities
 
 
4,272
 
 
 
5,900
 
Deferred tax assets, gross (net of accumulated write-down provisions)
 
 
 7,615
 
 
 
8,347
 
Deferred tax liabilities available for offset
 
 
 (3,684)
 
 
 
(4,269
)
Deferred tax assets
 
 
3,931
 
 
 
4,078
 
 
The most significant temporary differences giving rise to net deferred tax liabilities are disclosed below:
(€ million)
 
Carrying
amount at
December 31,
2018
 
 
 
Carrying
amount at
December 31,
2017
 
 
Deferred tax liabilities
 
 
 
 
 
 
 
 
Accelerated tax depreciation
 
 
6,612
 
 
 
8,323
 
Difference between the fair value and the carrying amount of assets acquired
 
 
849
 
 
 
1,106
 
Site restoration and abandonment (tangible assets)
 
 
85
 
 
 
305
 
Application of the weighted average cost method in evaluation of inventories
 
 
44
 
 
 
70
 
Other
 
 
366
 
 
 
365
 
 
 
 
7,956
 
 
 
10,169
 
Deferred tax assets, gross
 
 
 
 
 
 
 
 
Carry-forward tax losses
 
 
(5,528
)
 
 
(5,240
)
Site restoration and abandonment (provisions for contingencies)
 
 
(1,986
)
 
 
(2,747
)
Timing differences on depreciation and amortization
 
 
(2,104
)
 
 
(2,164
)
Accruals for impairment losses and provisions for contingencies
 
 
(1,460
)
 
 
(1,404
)
Impairment losses
 
 
(792
)
 
 
(801
)
Over/Under lifting
 
 
(604
)
 
 
(395
)
Employee benefits
 
 
(212
)
 
 
(194
)
Unrealized intercompany profits
 
 
(124
)
 
 
(130
)
Other
 
 
(546
)
 
 
(534
)
 
 
 
(13,356
)
 
 
(13,609
)
Accumulated write-downs of deferred tax assets
 
 
5,741
 
 
 
5,262
 
Deferred tax assets, net
 
 
(7,615
)
 
 
(8,347
)
 
The following table summarizes the changes in deferred tax liabilities and assets:
(€ million)
 
Deferred tax
liabilities
 
Deferred tax
assets, gross
 
Accumulated
write-downs of
deferred tax assets
 
Deferred tax
assets, net of
impairments
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount – beginning of the year
 
 
10,169
 
 
 
(13,609
)
 
 
5,262
 
 
 
(8,347
)
Changes in accounting principles (IFRS 15)
 
 
37
 
 
 
(237
)
 
 
 
 
 
 
(237
)
Carrying amount restated – beginning of the year
 
 
10,206
 
 
 
(13,846
)
 
 
5,262
 
 
 
(8,584
)
Additions
 
 
1,147
 
 
 
(1,478
)
 
 
253
 
 
 
(1,225
)
Deductions
 
 
(802
)
 
 
1,523
 
 
 
(43
)
 
 
1,480
 
Currency translation differences
 
 
283
 
 
 
(278
)
 
 
71
 
 
 
(207
)
Decrease through loss of control of subsidiary
 
 
(2,778
)
 
 
813
 
 
 
 
 
 
 
813
 
Other changes
 
 
(100
)
 
 
(90
)
 
 
198
 
 
 
108
 
Carrying amount at the end of the year
 
 
7,956
 
 
 
(13,356
)
 
 
5,741
 
 
 
(7,615
)
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount at the beginning of the year
 
 
10,953
 
 
 
(13,698
)
 
 
5,622
 
 
 
(8,076
)
Additions
 
 
1,171
 
 
 
(2,341
)
 
 
212
 
 
 
(2,129
)
Deductions
 
 
(835
)
 
 
1,588
 
 
 
(349
)
 
 
1,239
 
Currency translation differences
 
 
(1,123
)
 
 
862
 
 
 
(202
)
 
 
660
 
Other changes
 
 
3
 
 
 
(20
)
 
 
(21
)
 
 
(41
)
Carrying amount at the end of the year
 
 
10,169
 
 
 
(13,609
)
 
 
5,262
 
 
 
(8,347
)
   
Carry-forward tax losses amounted to €19,108 million out of which €13,753 million can be used indefinitely. Carry-forward tax losses regarded Italian companies for €10,786 million and foreign companies for €8,322 million. Deferred tax assets recognized on these losses amounted to €2,615 million and €2,913 million, respectively.
Italian taxation law allows the carry-forward of tax losses indefinitely. Foreign taxation laws generally allow the carry-forward of tax losses over a period longer than five years, and in many cases, indefinitely. An average tax rate of
24
% was applied to tax losses of Italian subsidiaries to determine the portion of the carry-forwards tax losses, which will be utilized in future years to offset expected taxable profit. The corresponding rate for foreign subsidiaries
was
35
%.
Accumulated write-down provisions of deferred tax assets related to Italian companies for €4,133 million and foreign companies for €1,608 million.