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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) 2021 2020
Current income tax charge:
Tax payable 789 750
Deferred tax:
Relating to original and reversal of temporary differences -10 30
Income tax expense reported in the income statement 779 780
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, nonrefundable
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 2020). The main components are specified.
(NOK million) 2021 2020
Profit before tax as reported in the income statement 2 890 3 158
Share of profit of associates and joint ventures net of tax -496 -746
Profit before tax excluding associates and joint ventures 2 394 2 412
Income taxes at statutory tax rate 22 % 527 22 % 531
Non refundable foreign withholding tax 3 % 78 2 % 50
Corrections previous years 1 % 21 0 % 10
Tax effect related to equity accounted companies 3 % 64 2 % 56
Non deductible expenses and non taxable income 2 % 41 2 % 41
Unused tax losses not recognised as deferred tax assets 2 % 54 4 % 92
Difference between tax rates in Norway and abroad 0 % -6 0 % 1
Total income tax expense 779 780
Effective tax rate excluding profit from associates and joint ventures 33 % 32 %
Effective tax rate based on profit before tax 27 % 25 %
Specification of total tax payable
(NOK million) 31.12.2021 31.12.2020
Tax payable for the year 789 750
Prepaid taxes -497 -412
Withholding taxes receivable -103 -122
Other tax payable 37 44
Total tax payable 227 259
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) 31.12.2021 31.12.2020
Non-current assets 423 653
Current assets -330 -360
Liabilities -1 330 -1 387
Tax loss carried forward -110 -101
Net temporary differences and tax loss carried forward -1 347 -1 195
Net deferred tax presented in the consolidated statement
of financial position
Deferred tax assets 386 358
Deferred tax liabilities -73 -62
Net deferred tax 313 296
Specification of tax loss carried forward and unused tax credits
(NOK million) 31.12.2021 31.12.2020
2021 124
2022 73 67
2023 20 33
2024 48 47
2025 47 578
2026 and after 573 -
Without expiration 698 728
Total loss carried forward 1 459 1 576
Calculated nominal tax effect of tax loss carried forward 434 465
Valuation allowance -404 -437
Deferred tax assets recognised from tax loss carried forward 31 28
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 the Philippines
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.
Jotun Group
38 I Jotun Annual Report 2021