19) Basis of taxation
TOTAL S.A. is subject to French corporation tax according to the ordinary rules of law, i.e. based on the principle of territoriality of tax stipulated in the French Tax Code (Article 209-I). It is also taxed outside France on income from its direct operations abroad.
Moreover, since January 1, 1992, TOTAL S.A. has elected the 95%-owned French subsidiaries tax regime provided for by Articles 223 A et seq. of the French Tax Code (Régime de l’intégration fiscale). In accordance with the integration agreement signed between TOTAL S.A. and its consolidated subsidiaries, the losses realized by these subsidiaries during the consolidation period are definitively acquired by the parent company.
The tax Group consists of 184 subsidiaries owned by 95% whose main contributors to the consolidated taxable income at December 31, 2014 are:
- Total Holdings Europe;
- Total Marketing Services;
- Total Raffinage France;
- Total E&P Holdings;
- Elf Aquitaine;
- Total Treasury.
The French tax rate consists of the standard corporation tax rate (33.33%), plus additional contributions in effect in 2014, which brings the overall income tax rate to 38%.
An additional corporation tax contribution of 3% payable on dividends distributed by French or foreign companies and organizations subject to corporation tax in France was created by the amending finance law for 2012. This new contribution is payable for dividends paid on or after August 17, 2012, the date on which the law came into force.
The impact of the additional contribution to corporation tax is an expense of €167 million.
For the fiscal year 2014, TOTAL S.A. recorded a net tax expense of €1,522 million, which is broken down into net tax income of €665 million received primarily from the subsidiaries under the tax consolidation scheme, a tax expense of €2,020 million paid by the foreign branches and the additional tax contribution of €167 million.
TOTAL S.A. does not record deferred tax in its statutory financial statements; however, the main temporary differences are as follows: