Note 29 Tax
Current tax expense
Movement in deferred tax
The recognised tax expense of €54 million is made up of tax charges of €56 million for 2017 and an adjustment of €2 million (gain) relating to prior years. This tax recovery largely relates to the effect on corporate income tax of various investment incentives in respect of investments in earlier years for which final approval was received in 2017.
The corporate income tax charge on the taxable profit of the Alliander N.V. tax group for 2017 amounts to €51 million. This is the balance of the calculated corporate income tax on the profit for 2017 (€55 million) and the calculated corporate income tax on movements in balance sheet items recognised directly in equity (€4 million tax credit).
The movement in deferred tax (€14 million down) relates to the movement in deferred tax assets.
The table below provides a reconciliation between the corporate income tax rate in the Netherlands and the effective tax rate:
Reconciliation of effective corporate income tax rate
Enacted corporate income tax rate in the Netherlands
Losses not accounted for
Other permanent differences
Effective corporate income tax rate
The effective tax rate is the tax burden expressed as a percentage of the profit before tax excluding the profits after tax from associates and joint ventures. The effective tax rate in 2017 amounted to 25.7% (2016: 27.5%). The difference compared with the standard rate of tax of 25% is the combined effect of not recognising the losses of international operations (having the effect of increasing the tax rate by 1.4%-points) and other permanent differences (downward effect of 0.7%-points). These other permanent differences mainly concern the effect on corporate income tax of tax breaks designed to encourage investment.