9) Income taxes
TOTAL S.A. is taxed in accordance with the common French tax regime.
Since August 2012, an additional tax to Corporate income tax of 3% is due on dividends distributed by French companies or foreign organizations subject to Corporate income tax in France. This tax is liable on amounts distributed, the payment of which was due from August 17th, 2012, the effective date of the law.
The impact of this additional tax for the Group is a charge of $222 million in 2014, $214 million in 2013 and of $154 million in 2012. This additional tax is not tax deductible.
In addition, no deferred tax is recognized for the temporary differences between the carrying amounts and tax bases of investments in foreign subsidiaries which are considered to be permanent investments. Undistributed earnings from foreign subsidiaries considered to be reinvested indefinitely amounted to $50,983 million as of December 31, 2014. The determination of the tax effect relating to such reinvested income is not practicable.
No deferred tax is recognized on unremitted earnings (approximately $39,244 million) of the Group’s French subsidiaries since the remittance of such earnings would be tax exempt for the subsidiaries in which the Company owns 95% or more of the outstanding shares.
Income taxes are detailed as follows:
Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:
Carried forward tax losses on net operating losses in the table above for $5,213 million as of December 31, 2014, includes notably France for $1,283 million, the United Kingdom for $1,128 million, Canada for $739 million and Belgium for $736 million.
The impairment of deferred tax assets in the table above for $3,301 million as of December 31, 2014, relates notably to Congo for an amount of $1,030 million, to France for an amount of $939 million and to Belgium for an amount of $415 million.
After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:
The net deferred tax variation in the balance sheet is analyzed as follows:
Reconciliation between provision for income taxes and pre-tax income:
The difference between the French tax rate and the tax rates of foreign subsidiaries is mainly due to the taxation of profits made by the Group in countries where it conducts its exploration and production activities at higher tax rates than French tax rates.
The French statutory tax rate includes the standard corporate tax rate (33.33%) and additional applicable taxes that bring the overall tax rate to 38.00% in 2014 (versus 38.00% in 2013 and 36.10% in 2012).
Permanent differences are mainly due to impairment of goodwill and to dividends from non-consolidated companies as well as the specific taxation rules applicable to certain activities.
Net operating losses and carried forward tax credits
Deferred tax assets related to carried forward tax credits on net operating losses expire in the following years: