Note 17 Deferred tax

The deferred tax item is made up as follows:

Deferred tax assets

This item amounting to €42 million comprises the temporary differences between the reported carrying amounts of the items of property, plant and equipment and other balance sheet items, including investments and provisions, and the corresponding valuation for tax purposes.

The deferred tax assets of €41 million in respect of property, plant and equipment are the result of differences between the carrying amounts in the financial statements and the valuation for tax purposes. Alliander became liable to pay corporate income tax on 1 January 1998. The carrying amounts of the property, plant and equipment agreed with the Dutch Tax & Customs Administration as at 1 January 1998 have depreciation periods extending ahead as far as 2030. Realisation of the temporary difference relating to these assets is therefore spread out over this period. In addition, the deferred tax under the item Property, plant and equipment refers to the general overhead surcharge that has been capitalised for tax purposes, the effects of implementing IFRS accounting policies in 2005, and use of the discretionary depreciation scheme for tax purposes.

The remaining portion of the deferred tax asset of €1 million consists of the differences in the valuation of provisions and other securities and investments for commercial purposes and for tax purposes.

As at year-end 2023, there was a total unrecognised deferred tax asset of €19 million (year-end 2022: €20 million), made up of:

• tax loss carryforwards from our activities in Germany: €16 million, which have not been recognised due to the projected results for the German entities in the medium term;

• An amount of €3 million relates to a Dutch subsidiary acquired in 2018.

Gross movement in deferred tax assets

The decrease in deferred tax assets by €98 million in 2023 consists of a realisation of temporary differences and the outcome of the application of the scheme for discretionary depreciation for tax purposes in 2023. Under this scheme, subject to certain conditions, a taxpayer can depreciate for tax purposes up to a maximum of 50% of the acquisition value or production costs of a business asset of its choice in one go in 2023. Application of this arrangement leads to temporary differences between the commercial carrying amount for property, plant and equipment and the valuation for tax purposes.

The movement of the temporary differences included in the income statement results in an income of €101 million. The movement in balance sheet items that are recognised directly in equity is €3 million, and this amount relates to reclassification to ‘assets held for sale’.