BP 2015 Annual Report Download - page 134

8. Taxation – continued
For 2013, the effective tax rate is not affected significantly by impairment losses or the impact of the Gulf of Mexico oil spill.
$ million
2015
excluding
impacts of
Gulf of
Mexico oil
spill and
impairments
2015
impacts of
Gulf of
Mexico oil
spill and
impairments 2015
2014
excluding
impairments
2014
impacts of
impairments 2014 2013
Profit (loss) before taxation 4,031 (13,602) (9,571) 13,166 (8,216) 4,950 30,221
Tax charge (credit) on profit or loss 945 (4,116) (3,171) 5,036 (4,089) 947 6,463
Effective tax rate 23% 30% 33% 38% 50% 19% 21%
% of profit or loss before taxation
UK statutory corporation tax rate 20 20 20 21 21 21 23
Increase (decrease) resulting from
UK supplementary and overseas taxes at higher or
lower ratesa–182517 34 (11) 4
Tax reported in equity-accounted entities (10) – 4 (5) – (14) (2)
Adjustments in respect of prior years 1––(2) – (6) 1
Movement in deferred tax not recognized 17 (5) (14) 4 (3) 17 2
Tax incentives for investment (8) – 3 (4) – (10) (2)
Gulf of Mexico oil spill non-deductible costs – (2) (3) ––1–
Permanent differences relating to disposals (3) – 1 (1) – (1) (8)
Foreign exchange 18 – (8) 4 – 10 2
Items not deductible for tax purposes 10 – (4) 4 (2) 12 1
Decrease in rate of UK supplementary chargeb(23) – 10 ––––
Other 1 (1) (1) ––––
Effective tax rate 23 30 33 38 50 19 21
aFor 2015 excluding impacts of the Gulf of Mexico oil spill and impairments, the most significant countries impacting upon the rate were the US (with an applicable statutory tax rate of 35%), Angola
(50%), Germany (32%), Indonesia (42%) and UK North Sea (50%). However because there were profits in some countries and losses in others, the net impact on the effective tax rate reconciliation
was less than 1%. For 2014 excluding impairments, jurisdictions which contribute significantly to this item are Angola (50%), Trinidad (55%) and the US (35%). For 2013, jurisdictions which contribute
significantly are Angola, the UK North Sea and Trinidad, with applicable statutory tax rates of 50%, 62% and 55% respectively.
bFor 2015, this relates to the one-off deferred tax impact of the enactment of legislation to reduce the UK supplementary charge tax rate applicable to profits arising in the North Sea from 32% to 20%.
Deferred tax
$ million
Analysis of movements during the year in the net deferred tax liability 2015 2014
At 1 January 11,584 16,454
Exchange adjustments 86 122
Charge (credit) for the year in the income statement (4,752) (3,545)
Charge (credit) for the year in other comprehensive income 1,140 (1,563)
Charge (credit) for the year in equity 936
Acquisitions and disposals (13) 80
At 31 December 8,054 11,584
The following table provides an analysis of deferred tax in the income statement and the balance sheet by category of temporary difference:
$ million
Income statement Balance sheet
2015 2014 2013 2015 2014
Deferred tax liability
Depreciation (102) (2,178) (474) 28,712 29,062
Pension plan surpluses 84 (272) (691) 878 –
Derivative financial instruments (326) 527 99 961 1,089
Other taxable temporary differences 59 (1,805) (298) 1,266 1,356
(285) (3,728) (1,364) 31,817 31,507
Deferred tax asset
Pension plan and other post-retirement benefit plan deficits 12 492 787 (1,972) (2,761)
Decommissioning, environmental and other provisions (2,513) 52 1,385 (13,737) (11,237)
Derivative financial instruments 62 166 30 (710) (575)
Tax credits 256 589 (174) (43) (298)
Loss carry forward (2,239) (1,397) (343) (5,985) (3,848)
Other deductible temporary differences (45) 281 357 (1,316) (1,204)
(4,467) 183 2,042 (23,763) (19,923)
Net deferred tax charge (credit) and net deferred tax liability (4,752) (3,545) 678 8,054 11,584
Of which – deferred tax liabilities 9,599 13,893
– deferred tax assets 1,545 2,309
130 BP Annual Report and Form 20-F 2015