Taxation (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Tax Charge in Income Statement


	€ million			€ million			€ million
Tax charge in income statement	2017			2016			2015
Current tax
Current year		(2,398	)		(2,026	)		(1,992	)
Over/(under) provided in prior years		(21	)		158			(57	)
		(2,419	)		(1,868	)		(2,049	)
Deferred tax
Origination and reversal of temporary differences		51			(65	)		82
Changes in tax rates		609			(7	)		(13	)
Recognition of previously unrecognised losses brought forward		92			18			19
		752			(54	)		88
		(1,667	)		(1,922	)		(1,961	)

Summary of Reconciliation of Effective Tax Rate

The reconciliation between the computed weighted average rate of income tax expense, which is generally applicable to Unilever companies, and the actual rate of taxation charged is as follows:


Reconciliation of effective tax rate	% 2017			% 2016			% 2015
Computed rate of tax^(a)		26			26			24
Differences between computed rate of tax and effective tax rate due to:
Incentive tax credits		(4	)		(4	)		(5	)
Withholding tax on dividends		2			3			2
Expenses not deductible for tax purposes		1			1			1
Irrecoverable withholding tax		1			1			2
Income tax reserve adjustments – current and prior year		-			(1	)		2
Transfer to/(from) unrecognised deferred tax assets		1			-			1
Others		(1	)		-			-
Underlying effective tax rate		26			26			27
Non-underlying items within operating profit^(b)		1			-			1
Premium paid on buy back of preference shares^(b)		1			-			-
Impact of US tax reform^(b)		(7	)		-			-
Effective tax rate		21			26			28

^(a)

The computed tax rate used is the average of the standard rate of tax applicable in the countries in which Unilever operates, weighted by the amount of profit before taxation generated in each of those countries. For this reason, the rate may vary from year to year according to the mix of profit and related tax rates.

^(b)	See note 3 for explanation of non-underlying items

Summary of Movements in Deferred Tax Asset (Liability)


	€ million			€ million			€ million			€ million			€ million			€ million			€ million			€ million
Movements in 2017 and 2016	As at 1 January 2017			Income statement			Other			As at 31 December 2017			As at 1 January 2016			Income statement			Other			As at 31 December 2016
Pensions and similar obligations		766			(16	)		(434	)		316			557			7			202			766
Provisions and accruals		922			(154	)		(115	)		653			708			68			146			922
Goodwill and intangible assets		(1,928	)		654			(378	)		(1,652	)		(1,301	)		(104	)		(523	)		(1,928	)
Accelerated tax depreciation		(870	)		109			82			(679	)		(752	)		(85	)		(33	)		(870	)
Tax losses		131			(36	)		35			130			123			(6	)		14			131
Fair value gains		(7	)		104			3			100			(25	)		14			4			(7	)
Fair value losses		29			65			(70	)		24			16			8			5			29
Share-based payments		169			(5	)		30			194			190			(14	)		(7	)		169
Other		81			31			(26	)		86			(75	)		58			98			81
		(707	)		752			(873	)		(828	)		(559	)		(54	)		(94	)		(707	)

Summary of Deferred Tax Assets and Liabilities

The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet:


	€ million			€ million			€ million			€ million			€ million			€ million
Deferred tax assets and liabilities	Assets 2017			Assets 2016			Liabilities 2017			Liabilities 2016			Total 2017			Total 2016
Pensions and similar obligations		294			568			22			198			316			766
Provisions and accruals		465			579			188			343			653			922
Goodwill and intangible assets		86			2			(1,738	)		(1,930	)		(1,652	)		(1,928	)
Accelerated tax depreciation		(21	)		(60	)		(658	)		(810	)		(679	)		(870	)
Tax losses		125			128			5			3			130			131
Fair value gains		23			28			77			(35	)		100			(7	)
Fair value losses		3			9			21			20			24			29
Share-based payments		74			44			120			125			194			169
Other		36			56			50			25			86			81
		1,085			1,354			(1,913	)		(2,061	)		(828	)		(707	)
Of which deferred tax to be recovered/(settled) after more than 12 months		730			1,157			(1,868	)		(2,206	)		(1,138	)		(1,049	)

Summary of Tax Effects of Components of Other Comprehensive Income

Tax effects of the components of other comprehensive income were as follows:


	€ million			€ million			€ million			€ million			€ million		€ million
	Before tax 2017			Tax (charge)/ credit 2017			After tax 2017			Before tax 2016			Tax (charge)/ credit 2016		After tax 2016
Fair value gains/(losses) on financial instruments		(61	)		(14	)		(75	)		(15	)		-		(15	)
Remeasurements of defined benefit pension plans		1,620			(338	)		1,282			(1,221	)		241		(980	)
Currency retranslation gains/(losses)		(1,024	)		41			(983	)		217			-		217
		535			(311	)		224			(1,019	)		241		(778	)