Under management agreements, all earnings of KPMG N.V. are distributed to the partners, through Coöperatie KPMG U.A., who pay tax on these earnings. The Group has a ruling for corporate income tax purposes, under which total net income before tax is subject to corporate income tax at the level of Coöperatie KPMG U.A., KPMG N.V. and the practice companies of the individual equity partners respectively. For this reason, income tax payable by the Group itself is limited.
Tax on the profit share of KPMG N.V. is calculated using the average tax rate applicable for the year. For 2021/2022, the average tax rate was 25.0% (2020/2021: 24.7%).
The table below provides a reconciliation between accounting profit and taxable profit.
|
EUR 000 |
2021/2022 |
2020/2021 |
|
Profit before tax |
119,480 |
111,490 |
|
Expenses related to early retired partners |
-274 |
-1,436 |
|
Tax-exempt income |
-3,331 |
-197 |
|
Non-deductible expenses |
1,356 |
1,433 |
|
Temporary differences |
-2,130 |
-412 |
|
Taxable profit |
115,101 |
110,878 |
|
Of which taxable by: |
||
|
KPMG N.V. |
6,419 |
6,217 |
|
Coöperatie KPMG U.A. |
1,076 |
1,016 |
|
Practice companies of the individual equity partners |
107,606 |
103,645 |
12.1 Amounts recognized in profit or loss
|
EUR 000 |
2021/2022 |
2020/2021 |
|
Current tax expense |
||
|
Current year |
1,605 |
1,532 |
|
Adjustments for prior years |
- |
2 |
|
1,605 |
1,534 |
|
|
Deferred tax expense/(income) |
||
|
Recognized deductible temporary differences |
461 |
-259 |
|
Tax expense on continuing operations |
2,066 |
1,275 |
12.2 Movement in deferred tax balances
|
EUR 000 |
Net balance at 1 October |
Recognized in profit or loss (see 12.1) |
Net balance at 30 September |
Deferred tax asset |
Deferred tax liability |
|
2020/2021 |
|||||
|
Property plant and equipment |
2,310 |
-333 |
1,977 |
1,977 |
– |
|
Jubilee benefits |
210 |
35 |
245 |
245 |
– |
|
Lease liabilities |
22 |
557 |
579 |
579 |
– |
|
Deferred tax balance |
2,542 |
259 |
2,801 |
2,801 |
– |
|
2021/2022 |
|||||
|
Property plant and equipment |
1,977 |
-617 |
1,360 |
1,360 |
– |
|
Jubilee benefits |
245 |
-80 |
165 |
165 |
– |
|
Lease liabilities |
579 |
236 |
815 |
815 |
– |
|
Deferred tax balance |
2,801 |
-461 |
2,340 |
2,340 |
– |
The key factors that determine the valuation of deferred tax assets are the probability of future taxable profits, the tax rates that are expected to be applied to temporary differences when they reverse and the assumption that it is expected that the carrying amount can be recovered. An increase of EUR 89 of the amount recognized in profit or loss relates to changes in enacted or substantially enacted tax rates (2020/2021: an increase of EUR 362).
12.3 Current tax balances
Coöperatie KPMG U.A. is head of the fiscal unity for income tax purposes. For this reason, current tax balances are included in the current account with Coöperatie KPMG U.A.