Logotype

financial statements 2013

21. Tax assets and liabilities

Print this page

21.1 Consolidated tax group

Pursuant to current legislation, the BBVA Consolidated Tax Group includes the Bank (as the parent company) and its Spanish subsidiaries that meet the requirements provided for under Spanish legislation regulating the taxation regime for the consolidated profit of corporate groups.

The Group’s non-Spanish other banks and subsidiaries file tax returns in accordance with the tax legislation in force in each country.

21.2 Years open for review by the tax authorities

The years open to review in the BBVA Consolidated Tax Group as of 31 December, 2013 are 2007 and subsequent year for the main taxes applicable.

The remainder of the Spanish consolidated entities in general have the last four years open for inspection by the tax authorities for the main taxes applicable, except for those in which there has been an interruption of the limitation period due to the start of an inspection.

In 2011, as a result of actions by the tax authorities, tax inspections proceedings were instituted for the years beginning (and including) 2006, some of which were contested. After considering the temporary nature of some of the items assessed in the proceedings, provisions were recognized for probable tax liabilities, if any, that might arise from these assessments according to Group’s best estimates.

In view of the varying interpretations that can be made of some applicable tax legislation, the outcome of the tax inspections of the open years that could be conducted by the tax authorities in the future could give rise to contingent tax liabilities which cannot be reasonably estimated at the present time. However, the Group considers that the possibility of these contingent liabilities becoming actual liabilities is remote and, in any case, the tax charge which might arise therefore would not materially affect the Group’s accompanying consolidated financial statements.

21.3 Reconciliation

The reconciliation of the Group’s corporate income tax expense resulting from the application of the standard income tax rate and the income tax expense recognized in the accompanying consolidated income statements is as follows:

Excel Download Excel
Reconciliation of Taxation at the Spanish Corporation Tax Rate to the Tax Expense Recorded for the Period Millions of Euros
2013 2012 2011
Amount Effective
Tax %
Amount Effective
Tax %
Amount Effective
Tax %







Consolidated profit before tax 3,070
2,111
3,722
From continuing operations 1,160
1,582
3,398
From discontinued operations 1,910
529
324
Taxation at Spanish corporation tax rate 921
633
1,117
Lower effective tax rate from our foreign entities (*) (498)
(273)
(287)
Mexico (301) 19.53% (133) 24.60% (132) 24.76%
Chile (23) 23.00% (54) 17.77% (50) 10.90%
Venezuela (128) 13.16% (109) 13.23% (71) 20.59%
Colombia (20) 25.06% (16) 26.60% (16) 23.77%
Peru (59) 20.74% (18) 26.64% (16) 29.01%
Others 33 - 57 - (2) -
Decrease of tax expense (Amortization of certain goodwill) (20)
(146)
(188)
Revenues with lower tax rate (dividends) (50)
(85)
(151)
Equity accounted earnings (211)
(316)
(238)
Other effects (53)
(30)
(16)
Current income tax 89
(217)
237
Of which:





Continuing operations 46
(352)
158
Discontinued operations 43
135
79
(*) Calculated by applying the difference between the tax rate in force in Spain and the one applied to the Group’s earnings in each jurisdiction.

The item "Other effects" of the above table includes the effect of income derived from the estimates, at closing of the year 2013, of tax liabilities generated from the integration of Unnim. Additionally, it includes the effect of the losses associated to the CNCB transaction (Note 3) that are not deductible.

The effective income tax rate for the Group in 2013, 2012 and 2011 is as follows:

Excel Download Excel
Effective Tax Rate Millions of Euros
2013 2012 2011
Income from:


Consolidated Tax Group (*) (2,909) (3,972) 679
Other Spanish Entities (13) 589 2
Foreign Entities 5,992 5,494 3,040
Total (**) 3,070 2,111 3,722
Income tax and other taxes 89 (217) 237
Effective Tax Rate 2.90% (10.28)% 6.37%
(*) Income from consolidated tax Group include income from entities accounted for equity method assigned to BBVA, S.A. (**) Includes income before taxes from continuing and discontinued transactions

21.4 Income tax recognized in equity

In addition to the income tax expense recognized in the accompanying consolidated income statements, the Group has recognized the following income tax charges for these items in the consolidated equity:

Excel Download Excel
Tax Recognized in Total Equity Millions of Euros
2013 2012 2011
Charges to total equity


Debt securities (223) - -
Equity instruments (9) (19) (74)
Subtotal (232) (19) (74)
Credits to total equity (*)


Equity instruments - - -
Debt securities and others - 196 231
Subtotal - 196 231
Total (232) 177 157
(*) Tax asset credit to total equity due primarily to financial instruments losses.

21.5 Deferred taxes

The balance under the heading "Tax assets" in the accompanying consolidated balance sheets includes deferred tax assets. The balance under the “Tax liabilities” heading includes to the Group’s various deferred tax liabilities. The details of the most important tax assets and liabilities are as follows:

Excel Download Excel
Tax Assets and Liabilities Millions of Euros
2013 2012 2011
Tax assets-


Current 2,502 1,851 1,460
Deferred 9,080 9,799 6,267
Pensions 1,703 1,220 1,312
Portfolio 1,138 1,839 2,128
Other assets 456 277 257
Impairment losses 1,517 2,862 1,637
Other 512 1,195 627
Tax losses 3,754 2,406 306
Total 11,582 11,650 7,727
Tax Liabilities-


Current 993 1,058 727
Deferred 1,537 2,762 1,420
Portfolio 925 1,100 993
Charge for income tax and other taxes 612 1,662 427
Total 2,530 3,820 2,147

The BBVA Group has performed an estimation of the balance of tax assets that are considered guaranteed for the BBVA Tax Group in accordance with the Royal Decree-Law 14/2013, of November 29, dealing with urgent measures to adapt Spanish Law to the European Union regulation on financial entity supervision and solvency. This totaled performed at the year 2013 closing amounted to €4,373 million.

As of December 31, 2013, 2012 and 2011, the aggregate amount of temporary differences associated with investments in foreign subsidiaries, branches and associates and investments in joint venture entities, for which no deferred tax liabilities have been recognized in the accompanying consolidated balance sheets, were €297, €267 million and €527 million, respectively.

Tools