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Deferred tax assets and liabilities | 12 Months Ended
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Dec. 31, 2020
Disclosure of Deferred Tax Assets and Liabilities [abstract] |
Deferred tax assets and liablities | 12. Deferred tax assets and liabilities
(USD millions) |  | Property, plant and equipment |  | Intangible assets |  | Pensions and other benefit obligations of associates |  | Inventories |  | Tax loss carry- forwards |  | Other assets, provisions and accruals |  | Total |
Gross deferred tax assets at January 1, 2020 |  | 108 |  | 1 469 |  | 1 078 |  | 2 446 |  | 255 |  | 2 596 |  | 7 952 |
Gross deferred tax liabilities at January 1, 2020 |  | – 390 |  | – 3 610 |  | – 291 |  | – 287 |  | – 7 |  | – 1 325 |  | – 5 910 |
Net deferred tax balance at January 1, 2020 |  | – 282 |  | – 2 141 |  | 787 |  | 2 159 |  | 248 |  | 1 271 |  | 2 042 |
At January 1, 2020 |  | – 282 |  | – 2 141 |  | 787 |  | 2 159 |  | 248 |  | 1 271 |  | 2 042 |
Credited/(charged) to income |  | 89 |  | 110 |  | – 25 |  | 212 |  | – 164 |  | 71 |  | 293 |
Charged to equity |  |  |  |  |  |  |  |  |  |  |  | 9 |  | 9 |
Charged to other comprehensive income |  |  |  |  |  | – 3 |  |  |  |  |  | – 36 |  | – 39 |
Impact of acquisitions of businesses |  | 5 |  | – 1 945 |  |  |  | – 3 |  | 408 |  | 34 |  | – 1 501 |
Other movements |  | – 53 |  | 58 |  | 38 |  | – 25 |  | 5 |  | – 35 |  | – 12 |
Net deferred tax balance at December 31, 2020 |  | – 241 |  | – 3 918 |  | 797 |  | 2 343 |  | 497 |  | 1 314 |  | 792 |
Gross deferred tax assets at December 31, 2020 |  | 189 |  | 1 351 |  | 1 137 |  | 2 502 |  | 507 |  | 2 658 |  | 8 344 |
Gross deferred tax liabilities at December 31, 2020 |  | – 430 |  | – 5 269 |  | – 340 |  | – 159 |  | – 10 |  | – 1 344 |  | – 7 552 |
Net deferred tax balance at December 31, 2020 |  | – 241 |  | – 3 918 |  | 797 |  | 2 343 |  | 497 |  | 1 314 |  | 792 |
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: |  |  |  |  |  |  |  |  |  |  |  |  |  | 130 |
Deferred tax assets at December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  | 8 214 |
Deferred tax liabilities at December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  | – 7 422 |
Net deferred tax balance at December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  | 792 |
Gross deferred tax assets at January 1, 2019 |  | 191 |  | 1 233 |  | 1 188 |  | 3 722 |  | 273 |  | 2 175 |  | 8 782 |
Gross deferred tax liabilities at January 1, 2019 |  | – 622 |  | – 5 384 |  | – 273 |  | – 474 |  |  |  | – 805 |  | – 7 558 |
Net deferred tax balance at January 1, 2019 |  | – 431 |  | – 4 151 |  | 915 |  | 3 248 |  | 273 |  | 1 370 |  | 1 224 |
At January 1, 2019 |  | – 431 |  | – 4 151 |  | 915 |  | 3 248 |  | 273 |  | 1 370 |  | 1 224 |
Net deferred tax balance related to discontinued operations 1 |  | 82 |  | 1 403 |  | – 123 |  | – 248 |  | – 39 |  | – 217 |  | 858 |
Credited/(charged) to income |  | 74 |  | 605 |  | 308 |  | – 818 |  | – 113 |  | 298 |  | 354 |
Charged to equity |  |  |  | 8 |  |  |  |  |  | 75 |  | – 166 |  | – 83 |
Charged to other comprehensive income |  |  |  |  |  | – 313 |  |  |  |  |  | 24 |  | – 289 |
Impact of acquisitions of businesses |  | 3 |  | – 45 |  |  |  |  |  | 21 |  | – 26 |  | – 47 |
Other movements |  | – 10 |  | 39 |  |  |  | – 23 |  | 31 |  | – 12 |  | 25 |
Net deferred tax balance at December 31, 2019 |  | – 282 |  | – 2 141 |  | 787 |  | 2 159 |  | 248 |  | 1 271 |  | 2 042 |
Gross deferred tax assets at December 31, 2019 |  | 108 |  | 1 469 |  | 1 078 |  | 2 446 |  | 255 |  | 2 596 |  | 7 952 |
Gross deferred tax liabilities at December 31, 2019 |  | – 390 |  | – 3 610 |  | – 291 |  | – 287 |  | – 7 |  | – 1 325 |  | – 5 910 |
Net deferred tax balance at December 31, 2019 |  | – 282 |  | – 2 141 |  | 787 |  | 2 159 |  | 248 |  | 1 271 |  | 2 042 |
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: |  |  |  |  |  |  |  |  |  |  |  |  |  | 43 |
Deferred tax assets at December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  | 7 909 |
Deferred tax liabilities at December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  | – 5 867 |
Net deferred tax balance at December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2 042 |
1 Notes 1, 2 and 30 provide information related to discontinued operations.
The following table presents deferred tax assets and deferred tax liabilities, which are expected to have an impact on current taxes payable after more than 12 months:
(USD billions) |  | 2020 |  | 2019 |
Expected to have an impact on current tax payable after more than 12 months |  |  |  |  |
– Deferred tax assets |  | 4.5 |  | 4.3 |
– Deferred tax liabilities |  | 7.0 |  | 5.2 |
Deferred tax liabilities have not been recognized for the withholding tax and other taxes that would be payable on the remittance of earnings of foreign subsidiaries, as the Group has the ability to control any future reversal and the unremitted earnings are retained in the foreign subsidiaries for reinvestment. The total unremitted earnings retained for reinvestment in the Group’s foreign subsidiaries that would be subject to withholding tax or other taxes if remitted to the Group are estimated at approximately USD 27 billion in 2020 (2019: USD 26 billion). Temporary differences on which no deferred tax has been provided as they are permanent in nature related to:
(USD billions) |  | 2020 |  | 2019 |
Investments in subsidiaries |  | 5 |  | 3 |
Goodwill from acquisitions |  | – 27 |  | – 24 |
The gross value of tax-loss carry-forwards that have or have not been capitalized as deferred tax assets, with their expiry dates, is as follows:
(USD millions) |  | Not capitalized |  | Capitalized |  | 2020 total |
One year |  | 20 |  |  |  | 20 |
Two years |  | 1 |  | 5 |  | 6 |
Three years |  | 2 |  | 6 |  | 8 |
Four years |  | 23 |  |  |  | 23 |
Five years |  | 11 |  | 40 |  | 51 |
More than five years 1 |  | 3 400 |  | 2 291 |  | 5 691 |
Not subject to expiry |  | 323 |  | 683 |  | 1 006 |
Total |  | 3 780 |  | 3 025 |  | 6 805 |
1 Not capitalized more than five years includes USD 3.2 billion attributable to US state tax-loss carry-forwards, of which USD 1.6 billion relates to The Medicines Company, which was acquired in 2020 (see Note 2).
(USD millions) |  | Not capitalized |  | Capitalized |  | 2019 total |
One year |  | 14 |  | 0 |  | 14 |
Two years |  | 28 |  | 0 |  | 28 |
Three years |  | 28 |  | 6 |  | 34 |
Four years |  | 16 |  | 46 |  | 62 |
Five years |  | 127 |  | 37 |  | 164 |
More than five years |  | 125 |  | 2 214 |  | 2 339 |
Not subject to expiry |  | 310 |  | 35 |  | 345 |
Total |  | 648 |  | 2 338 |  | 2 986 |
(USD millions) |  | 2020 |  | 2019 |  | 2018 |
Tax losses carried forward that expired |  | 14 |  | 9 |  | 8 |
Deferred tax assets related to taxable losses of relevant Group entities are recognized to the extent it is considered probable that future taxable profits will be available against which such losses can be utilized in the foreseeable future. The Basel-Stadt cantonal tax reform was approved by voters in February 2019, with parts of the reform retroactively enacted per January 1, 2019. The newly enacted tax rate resulted in a decrease of the blended cantonal and federal tax rate from 22% to 13%. This change impacted the Group’s Basel-Stadt-domiciled operating subsidiaries. The Swiss federal tax reform was approved by voters in May 2019. The enactment of the Swiss federal tax reform required the abolishment of the holding company tax regimes as of January 1, 2020. As a result, the holding company tax rate increased from the current 8% to 13%, effective January 1, 2020. The enactment of these Swiss tax reforms required a revaluation of the deferred tax assets and liabilities to the newly enacted tax rates at the date of enactment. The following table shows the impact on the revaluation of deferred assets and liabilities in 2019, as at the respective dates of the enactment of the Swiss tax reforms:
(USD millions) |  | Income statement continuing operations |  | Equity |  | Total |
Deferred tax asset and liability revaluation |  |  |  |  |  |  |
Items previously recognized in consolidated income statement |  | 234 |  |  |  | 234 |
Items previously recognized in other comprehensive income 1 |  |  |  | – 358 |  | – 358 |
Total revaluation of deferred tax assets and liabilities |  | 234 |  | – 358 |  | – 124 |
1 Related to post-employment benefits

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- Definition The disclosure of deferred taxes. [Refer: Deferred tax liabilities; Deferred tax assets] + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2019-01-01 -Paragraph 10 -Subparagraph e -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=1&code=ifrs-tx-2019-en-r&anchor=para_10_e&doctype=Standard -URIDate 2019-03-27 + Details
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