5.1 TAXATION
Income taxes refer to taxation of the profits of the different companies in the Group. Value added tax, property
tax, custom duties and similar indirect taxes are not included in the tax expense. Income taxes are computed based
on profit before tax and broken into current taxes and changes in deferred taxes. Deferred tax assets and liabilities
are the result of temporary differences between financial and tax accounting.
The major components of the income tax expense are:
(NOK million) 2020 2019
Current income tax charge:
Tax payable 750 599
Deferred tax:
Relating to original and reversal of temporary differences 30 -70
Income tax expense reported in the income statement 780 529
Reconciliation of Norwegian nominal statutory tax rate to effective tax rate
The difference between the Group’s nominal and effective tax rate is mainly due to non-deductible expenses, non-refundable
withholding taxes on dividends and tax losses carried forward from operations without recognition of
deferred tax assets. In addition, the tax expense is driven by local income tax from associates where taxes are liable
by Jotun A/S as a foreign shareholder.
In the following table, reported income tax is reconciled with the calculated tax expense based on the Norwegian
tax rate of 22 per cent (22 per cent in 2019). The main components are specified.
(NOK million) 2020 2019
Profit before tax as reported in the income statement 3 158 2 079
Share of profit of associates and joint ventures net of tax -746 -497
Profit before tax excluding associates and joint ventures 2 412 1 582
Income taxes at statutory tax rate 22 % 531 22 % 348
Non refundable foreign withholding tax 2 % 50 2 % 27
Corrections previous years 0 % 10 -1 % -8
Tax effect related to equity accounted companies 2 % 56 3 % 45
Non deductible expenses and non taxable income 2 % 41 4 % 56
Unused tax losses not recognised as deferred tax assets 4 % 92 4 % 68
Difference between tax rates in Norway and abroad 0 % 1 0 % -6
Total income tax expense 780 529
Effective tax rate excluding profit from associates and joint ventures 32 % 33 %
Effective tax rate based on profit before tax 25 % 25 %
Specification of total tax payable
(NOK million) 31.12.2020 31.12.2019
Tax payable for the year 750 599
Prepaid taxes -412 -275
Withholding taxes receivable -122 -96
Other tax payable 44 37
Total tax payable 259 266
Specification of deferred tax
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for temporary differences and
tax loss carried forward are recognised to the extent that it is probable that future taxable income will be available
to utilise the credits. Deferred tax liabilities comprise the Group’s tax liabilities that are payable in the future.
(NOK million) 31.12.2020 31.12.2019
Non-current assets 653 304
Current assets -360 -312
Liabilities -1 387 -1 314
Tax loss carried forward -101 -71
Net temporary differences and tax loss carried forward -1 195 -1 393
Net deferred tax presented in the consolidated statement
of financial position
Deferred tax assets 358 360
Deferred tax liabilities -62 -38
Net deferred tax 296 323
Specification of tax loss carried forward and unused tax credits
(NOK million) 31.12.2020 31.12.2019
2020 74
2021 124 125
2022 67 61
2023 33 12
2024 47 526
2025 and after 578 -
Without expiration 728 842
Total loss carried forward 1 576 1 640
Calculated nominal tax effect of tax loss carried forward 465 494
Valuation allowance -437 -477
Deferred tax assets recognised from tax loss carried forward 28 17
Tax loss carried forward relates to subsidiaries with a history of losses that may not be used to offset taxable
income elsewhere in the Group. Jotun’s operations in the US, Brazil, India, Spain, South Africa and Pakistan have
substantial tax reducing temporary differences and tax losses carried forward that have not been recognised due
to uncertainty about future taxable profit available to utilise the credits.
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Jotun Group
38 I Jotun Annual Report 2020