The effective corporate income tax charge comprises the following:
The effective tax rate consists of the reported tax charge for the current year, divided by the profit before taxes. The effective tax rate in 2019 amounted to -16.1% (2018: 28.7%). The calculated weighted average tax rate of 25.0% mainly declines to the effective tax rate of -16.1% due to the recognition of the deferred tax assets of € 21.4 million for the application of the Dutch liquidation loss facility regarding US business (-41.9%) and the Finnish business (-3.0%). The main offsetting effect comes from the participation exemption, which increases the effective tax rate (+3.7%) as it includes the cumulative translation loss on the net US$ investment (see note 6.16.1). See note 6.15.2 for more details on the recognition of the deferred tax assets.
Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.