Accounting policies
Income tax is computed in accordance with the tax legislation in force in the countries where the income is taxable. In accordance with IAS 12, deferred tax is recognised on the temporary differences between the carrying amount and the tax base of assets and liabilities. It is calculated using the latest tax rates enacted or substantively enacted at the accounts closing date. The effects of a change in the tax rate from one period to another are recognised in the income statement in the period in which the change was decided, except where they relate to transactions recognised under other comprehensive income or directly in equity.
Deferred tax relating to share-based payments is taken to income to the extent that the deductible amount does not exceed the fair value of plans established according to IFRS 2.
Whenever subsidiaries have distributable reserves, a deferred tax liability is recognised in respect of the probable distributions that will be made in the foreseeable future. Moreover, shareholdings in associates and certain joint ventures give rise to recognition of a deferred tax liability in the event of differences between the carrying amount and the tax base of the shares.
Net deferred tax is determined on the basis of the tax position of each entity or group of entities included in the tax group under consideration and is shown under assets or liabilities for its net amount per tax group. Deferred tax is reviewed at each balance sheet date to take account of the impact of changes in tax law and the prospect of recovery. Deferred tax assets are recognised only to the extent that recovery is probable; an impairment allowance is recognised otherwise. Deferred tax assets and liabilities are not discounted.
| (in € millions) | 2024 | 2023 |
|---|---|---|
| Current tax | Current tax 2024 (2,429) |
Current tax 2023 (2,332) |
| Deferred tax | Deferred tax 2024 327 |
Deferred tax 2023 415 |
| of which temporary differences | of which temporary differences 2024 332 |
of which temporary differences 2023 375 |
| of which tax loss carryforwards | of which tax loss carryforwards 2024 (5) |
of which tax loss carryforwards 2023 40 |
| Total | Total 2024 (2,102) |
Total 2023 (1,917) |
The net tax expense for the period comprises:
The VINCI Group falls within the scope of application of the new Global Anti-Base Erosion Model Rules (GloBE Rules) and of the global minimum tax rate of 15% (Pillar Two) adopted by 140 OECD countries, as transposed into the French Tax Code through Article 33 of France’s 2024 budget law. These new rules came into force on 1 January 2024. The additional current tax payable as a result is not material. The Group is continuing to apply the amendments to IAS 12 that provide for a temporary exemption from accounting for deferred taxes arising from the implementation of Pillar Two rules.
The Group’s effective tax rate was 29.4% in 2024, compared with 27.7% in 2023. The effective tax rate was 29.2% in France and 29.5% outside France. The increase in the effective tax rate relative to 2023 was mainly because of the non-deductible nature of France’s new tax on long-distance transport infrastructure operators (TEITLD).
The Group’s effective tax rate for 2024 was higher than the theoretical tax rate of 25.83% in force in France, because of permanent differences (including the non-deductible nature of the TEITLD) and the impact of different tax rates applicable to companies operating in countries other than France. The difference between the tax calculated using the standard tax rate in force in France and the amount of tax effectively recognised in the year can be analysed as follows:
| (in € millions) | 2024 | 2023 |
|---|---|---|
| Income before tax and profit/(loss) of companies accounted for under the equity method | Income before tax and profit/(loss) of companies accounted for under the equity method 2024 7,156 |
Income before tax and profit/(loss) of companies accounted for under the equity method 2023 6,909 |
| Theoretical tax rate in France | Theoretical tax rate in France 2024 25.8% |
Theoretical tax rate in France 2023 25.8% |
| Theoretical tax expense expected | Theoretical tax expense expected 2024 (1,848) |
Theoretical tax expense expected 2023 (1,785) |
| Tax rate differential on foreign income | Tax rate differential on foreign income 2024 (61) |
Tax rate differential on foreign income 2023 (59) |
| Impact of tax loss carryforwards and other temporary differences that are not recognised or that have previously been subject to limitation | Impact of tax loss carryforwards and other temporary differences that are not recognised or that have previously been subject to limitation 2024 (22) |
Impact of tax loss carryforwards and other temporary differences that are not recognised or that have previously been subject to limitation 2023 (9) |
| Goodwill impairment losses | Goodwill impairment losses 2024 (2) |
Goodwill impairment losses 2023 (2) |
| Permanent differences and other | Permanent differences and other 2024 (168) |
Permanent differences and other 2023 (62) |
| Tax expense recognised | Tax expense recognised 2024 (2,102) |
Tax expense recognised 2023 (1,917) |
| Effective tax rate(*) | Effective tax rate(*) 2024 29.4% |
Effective tax rate(*) 2023 27.7% |
