4.1. Income tax
Accounting policies
Mandatory increases in loss/decreases in profit include current income tax (CIT) and deferred tax.
Deferred tax is determined using the balance-sheet method, based on temporary differences between the carrying amounts of assets and liabilities for accounting purposes and their tax base, except where temporary differences arise from the initial recognition of an asset or liability in a transaction which is not a business combination and, at the time of the transaction, affected neither profit before tax nor taxable income (tax loss).
Deferred tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset will be realised or the liability will be settled.
A deferred tax asset is recognised to the extent it is probable that taxable profit will be available against which deductible temporary differences, including tax losses and tax credit, can be utilised. For more information on tax credit, see Note 4.1.1.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, unless the Group company controls the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset if and only if the Group:
- Has a legally enforceable right to set off current tax assets against current tax liabilities; and
- The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Deferred and current tax is recognised as income or expense, except to the extent that the tax arises from a transaction or event that is credited or charged directly to other comprehensive income or to equity (deferred tax is then recognised in other comprehensive income or charged directly to equity).
Tax group
PGNiG SA was a representative of the PGNiG Tax Group under the agreement concluded in 2014, which expired on December 31st 2016. On September 19th 2016, a new agreement was signed to establish the PGNiG Tax Group for the tax years 2017–2020.
In the current reporting period the PGNiG Tax Group comprises: PGNiG S.A., PGNiG Obrót Detaliczny Sp. z o.o., PSG Sp. z o.o., PGNiG TERMIKA S.A., OSM Sp. z o.o., PGNiG SPV 5 Sp. z o.o., PGNiG SPV 6 Sp. z o.o., PGNiG SPV 7 Sp. z o.o.
The agreement to establish the PGNiG Tax Group for 2017–2020 was signed by the above companies and also by GEOFIZYKA Toruń S.A., PGNiG Technologie S.A. and PGNiG Serwis Sp. z o.o.
The other Group companies are separate CIT taxpayers. In accordance with applicable tax regulations, the companies included in the PGNiG Tax Group lost their separate status as CIT payers and such status was acquired by the PGNiG Tax Group, which allows CIT to be calculated jointly for the PGNiG Tax Group members.
The PGNiG Tax Group is a separate entity exclusively for the purposes of corporate income tax, and it should not be viewed as a separate legal person. Also, its separate tax status does not extend to other taxes; in particular, each of the PGNiG Tax Group member companies is a separate payer of VAT and of tax on civil-law transactions, and a separate remitter of personal income tax withholdings.
