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INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2022
Income taxes [Abstract]  
Disclosure of income taxes Income tax expense is as follows:
For the years ended December 31,
202220212020
(€ thousand)
Current tax expense269,924 218,540 120,115 
Deferred tax benefit(30,178)(12,001)(62,474)
Taxes relating to prior years(1,274)2,556 514 
Total income tax expense238,472 209,095 58,155 
Income tax reconciliation
The table below provides a reconciliation between actual income tax expense and the theoretical income tax expense, calculated on the basis of the applicable corporate tax rate in effect in Italy, which was 24.0 percent for each of the years ended December 31, 2022, 2021 and 2020.

For the years ended December 31,
202220212020
(€ thousand)
Theoretical income tax expense282,664 250,136 160,088 
Tax effect on:
Permanent and other differences(85,736)(79,267)(129,016)
Italian Regional Income Tax (IRAP)39,446 32,422 22,662 
Effect of changes in tax rates and tax regulations553 633 800 
Differences between foreign tax rates and the theoretical Italian tax rate and tax holidays1,945 2,077 1,734 
Taxes relating to prior years(1,274)2,556 514 
Withholding tax on earnings875 539 1,373 
Income tax expense238,472 209,095 58,155 
Effective tax rate20.2 %20.1 %8.7 %
Disclosure of deferred tax liabilities
The analysis of deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021, is as follows:

At December 31,
20222021
(€ thousand)
Deferred tax assets:
To be recovered after 12 months107,252 94,808 
To be recovered within 12 months96,130 73,949 
203,382 168,757 
Deferred tax liabilities:
To be realized after 12 months(86,160)(78,496)
To be realized within 12 months(40,347)(17,477)
(126,507)(95,973)
Net deferred tax assets/(liabilities)76,875 72,784 
Disclosure of deferred tax assets
The analysis of deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021, is as follows:

At December 31,
20222021
(€ thousand)
Deferred tax assets:
To be recovered after 12 months107,252 94,808 
To be recovered within 12 months96,130 73,949 
203,382 168,757 
Deferred tax liabilities:
To be realized after 12 months(86,160)(78,496)
To be realized within 12 months(40,347)(17,477)
(126,507)(95,973)
Net deferred tax assets/(liabilities)76,875 72,784 
Disclosure of deferred income tax liabilities
The movements in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:

At December 31, 2021
Recognized in consolidated income statement 
Charged to equity 
Translation
differences
and other
changes 
At December 31, 2022
(€ thousand)
Deferred tax assets arising on:
Provisions103,981 16,556 — (258)120,279 
Deferred income51,635 — — — 51,635 
Employee benefits3,041 — (376)— 2,665 
Foreign currency exchange rate differences610 2,830 — (1)3,439 
Cash flow hedge reserve8,455 — (8,455)— — 
Inventory obsolescence69,107 31,648 — 80 100,835 
Allowances for doubtful accounts5,178 50 — (5)5,223 
Depreciation17,555 (15)— (7)17,533 
Trademark step-up84,537 837 — — 85,374 
Patent box65,693 12,688 — — 78,381 
Other14,328 575 — (59)14,844 
Total deferred tax assets424,120 65,169 (8,831)(250)480,208 
Deferred tax liabilities arising on:
Depreciation(6,781)2,076 — (352)(5,057)
Capitalization of development costs(311,438)(44,134)— (2)(355,574)
Employee benefits(1,053)(457)— — (1,510)
Foreign currency exchange rate differences(526)(634)— — (1,160)
Cash flow hedge reserve— — (16,171)— (16,171)
Tax on undistributed earnings(17,404)6,826 — — (10,578)
Other(14,134)1,332 — (481)(13,283)
Total deferred tax liabilities(351,336)(34,991)(16,171)(835)(403,333)
Total net deferred tax assets/(liabilities)
72,784 30,178 (25,002)(1,085)76,875 
At December 31, 2020Recognized in consolidated income statement
Charged
to equity 
Translation
differences
and other
changes 
At December 31, 2021
(€ thousand)
Deferred tax assets arising on:
Provisions90,663 12,712 — 606 103,981 
Deferred income52,241 (606)— — 51,635 
Employee benefits2,931 — 110 — 3,041 
Foreign currency exchange rate differences516 95 — (1)610 
Cash flow hedge reserve— — 8,455 — 8,455 
Inventory obsolescence61,726 7,131 — 250 69,107 
Allowances for doubtful accounts5,643 (474)— 9 5,178 
Depreciation17,551 7 — (3)17,555 
Trademark step-up83,700 837 — — 84,537 
Patent box27,902 37,791 — — 65,693 
Other6,027 3,927 — 4,374 14,328 
Total deferred tax assets348,900 61,420 8,565 5,235 424,120 
Deferred tax liabilities arising on:
Depreciation(7,550)1,217 — (448)(6,781)
Capitalization of development costs(264,087)(47,349)— (2)(311,438)
Employee benefits(844)(209)— — (1,053)
Foreign currency exchange rate differences(559)33 — — (526)
Cash flow hedge reserve(9,505)— 9,505 — — 
Tax on undistributed earnings(15,861)(1,543)— — (17,404)
Other(11,747)(1,568)— (819)(14,134)
Total deferred tax liabilities(310,153)(49,419)9,505 (1,269)(351,336)
Total net deferred tax assets/(liabilities)
38,747 12,001 18,070 3,966 72,784 
Disclosure of deferred income tax assets
The movements in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:

At December 31, 2021
Recognized in consolidated income statement 
Charged to equity 
Translation
differences
and other
changes 
At December 31, 2022
(€ thousand)
Deferred tax assets arising on:
Provisions103,981 16,556 — (258)120,279 
Deferred income51,635 — — — 51,635 
Employee benefits3,041 — (376)— 2,665 
Foreign currency exchange rate differences610 2,830 — (1)3,439 
Cash flow hedge reserve8,455 — (8,455)— — 
Inventory obsolescence69,107 31,648 — 80 100,835 
Allowances for doubtful accounts5,178 50 — (5)5,223 
Depreciation17,555 (15)— (7)17,533 
Trademark step-up84,537 837 — — 85,374 
Patent box65,693 12,688 — — 78,381 
Other14,328 575 — (59)14,844 
Total deferred tax assets424,120 65,169 (8,831)(250)480,208 
Deferred tax liabilities arising on:
Depreciation(6,781)2,076 — (352)(5,057)
Capitalization of development costs(311,438)(44,134)— (2)(355,574)
Employee benefits(1,053)(457)— — (1,510)
Foreign currency exchange rate differences(526)(634)— — (1,160)
Cash flow hedge reserve— — (16,171)— (16,171)
Tax on undistributed earnings(17,404)6,826 — — (10,578)
Other(14,134)1,332 — (481)(13,283)
Total deferred tax liabilities(351,336)(34,991)(16,171)(835)(403,333)
Total net deferred tax assets/(liabilities)
72,784 30,178 (25,002)(1,085)76,875 
At December 31, 2020Recognized in consolidated income statement
Charged
to equity 
Translation
differences
and other
changes 
At December 31, 2021
(€ thousand)
Deferred tax assets arising on:
Provisions90,663 12,712 — 606 103,981 
Deferred income52,241 (606)— — 51,635 
Employee benefits2,931 — 110 — 3,041 
Foreign currency exchange rate differences516 95 — (1)610 
Cash flow hedge reserve— — 8,455 — 8,455 
Inventory obsolescence61,726 7,131 — 250 69,107 
Allowances for doubtful accounts5,643 (474)— 9 5,178 
Depreciation17,551 7 — (3)17,555 
Trademark step-up83,700 837 — — 84,537 
Patent box27,902 37,791 — — 65,693 
Other6,027 3,927 — 4,374 14,328 
Total deferred tax assets348,900 61,420 8,565 5,235 424,120 
Deferred tax liabilities arising on:
Depreciation(7,550)1,217 — (448)(6,781)
Capitalization of development costs(264,087)(47,349)— (2)(311,438)
Employee benefits(844)(209)— — (1,053)
Foreign currency exchange rate differences(559)33 — — (526)
Cash flow hedge reserve(9,505)— 9,505 — — 
Tax on undistributed earnings(15,861)(1,543)— — (17,404)
Other(11,747)(1,568)— (819)(14,134)
Total deferred tax liabilities(310,153)(49,419)9,505 (1,269)(351,336)
Total net deferred tax assets/(liabilities)
38,747 12,001 18,070 3,966 72,784