62 / 140
b) Reconciliation of the accounting profit to the income tax expense
The reconciliation of the accounting profit to the income tax expense is as follows:
Thousands of euros
2015
2014
Consolidated profit before tax
131,547
95,327
Permanent differences
9,570
4,769
Tax losses incurred prior to the formation of the
tax group used in 2015
(9)
(9)
Adjusted profit
141,108
100,087
Tax rate
28.00%
30.00%
Adjusted profit multiplied by tax rate
39,510
30,026
Tax credits
(6,520)
(13,158)
Current income tax expense
32,990
16,868
Deferred tax expense
(61)
(1,426)
Income tax adjustment
(589)
33,233
Total tax expense
32,340
48,675
Effective tax rate
24.58%
51.06%
The 2015 permanent differences include mainly negative consolidation differences (EUR
4,124 thousand), non-deductible impairment losses on equity instruments (EUR 11,036 miles
thousand), other non-deductible expenses (EUR 1,956 thousand) and donations (EUR 703
thousand).
The negative consolidation differences arise from the share of results of companies
accounted for using the equity method (+ EUR 2,321 thousand), increased amortisation of
the trademark under IFRSs (+ EUR 289 thousand) and accounting elimination differences (-
EUR 6,734 thousand).
In 2015 the Group earned tax credits for investment in audiovisual production amounting to
EUR 15,442 thousand. However, the tax credits indicated in the table above were recognised
by the Group in 2015 of which EUR 6,274 thousand relate to investment in audiovisual
production and EUR 246 thousand to donations to not-for-profit organisations.
In 2014 the Group made adjustments to bring the existing balance of deferred tax assets
and deferred tax liabilities -calculated in the past at a rate of 30%- into line with the
recoverable amount thereof calculated at 25%, based on the Company's best estimates of
the recovery of tax assets in future reporting periods.
The differences between the estimate made at year-end and the tax return effectively filed
gave rise to differences that not only affect the income tax expense, but also the adjustment
arising from the change in the tax rate, amounting to EUR 8 thousand and EUR (597)
thousand, respectively. These amounts are included under "Income Tax Adjustment".
The deferred tax expense relates to the tax effect of the deferred tax liability under IFRSs
(see Note 21-e).