10. Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax. The activities of the group are subject to corporate income tax in several countries, depending on presence and activity. The applicable statutory tax rates vary between 12.5% and 41.0%. The different tax jurisdictions in which the group operates can cause the Effective Tax Rate (ETR) to differ from the Dutch corporate tax rate.
(€ in thousands)
INCOME TAX (GAIN) / EXPENSE
In 2914, the ETR was –54.9% compared to 16.7% last year. The reconciliation between the tax charge on the basis of the Dutch tax rate and the Effective Tax Rate is as follows:
Dutch tax rate
Higher weighted average statutory rate of group activities
Income exempted from tax
Non tax deductible costs
Utilisation of losses not previously capitalised
Effect of prior years' settlements and/or adjustments
Remeasurement of deferred tax
EFFECTIVE TAX RATE
The income tax credited directly in equity in 2014 amounted to €6.9 million (2013: credit of €0.3 million).
Current and deferred taxes are recognised as an expense or income in the profit and loss account, except when they relate to items credited or debited directly to equity. In this case, the tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination.
The group's income tax expense is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.