21. Tax assets and liabilities

21.1 Consolidated tax group

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

The Group’s 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 December 31, 2012 are 2007 and following for the main taxes applicable.

The rest 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 action by the tax authorities, tax inspections proceedings were instituted for the years since (and including) 2006, some of which were contested. After considering the temporary nature of certain of the items assessed in the proceedings, provisions were set aside for the liabilities, if any, that might arise from these assessments according to our 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 objectively quantified at the present time. However, the Banks’ Board of Directors and its tax advisers consider 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.

Reconciliation

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

Download Excel

Reconciliation of Taxation at the Spanish Corporation Tax Rate to the Tax Expense Recorded for the Period	Millions of Euros
	2012		2011		2010
	Amount	Effective Tax %	Amount	Effective Tax %	Amount	Effective Tax %
Consolidated profit before tax	2,188		3,770		6,422
From continuing operations	1,659		3,446		6,059
From discontinued operations	529		324		363
Taxation at Spanish corporation tax rate	656		1,131		1,927
Lower effective tax rate from our foreign entities (*)	(314)		(311)		(242)
México	(133)	24.60%	(131)	24.17%	(118)	24.76%
Chile	(54)	17.77%	(49)	16.75%	(64)	10.90%
Venezuela	(109)	13.23%	(71)	11.75%	(25)	20.59%
Turkey	(41)	19.10%	(23)	19.65%	-	-
Colombia	(16)	26.60%	(17)	24.94%	(18)	23.77%
Peru	(18)	26.64%	(16)	16.25%	(4)	29.01%
Others	57		(4)		(13)
Decrease of tax expense (Amortization of certain goodwill)	(146)		(188)		-
Revenues with lower tax rate (dividends)	(85)		(151)		(128)
Equity accounted earnings	(221)		(180)		(100)
Other effects	(30)		(16)		(30)
Current income tax	(140)		285		1,427
Of which:
Continuing operations	(275)		206		1,345
Discontinued operations	135		79		82

(*) 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 effective tax rate for the Group in 2012, 2011 and 2010 is as follows:

Download Excel

Effective Tax Rate	Millions of Euros
	2012	2011	2010
Income from:
Consolidated Tax Group	(4,286)	487	2,398
Other Spanish Entities	589	2	(70)
Foreign Entities	5,886	3,281	4,094
Total	2,188	3,770	6,422
Income tax and other taxes	(140)	285	1,427
Effective Tax Rate	(6.38)%	7.55%	22.22%

21.3 Tax recognized in equity

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

Download Excel

Tax Recognized in Total Equity	Millions of Euros
	2012	2011	2010
Charges to total equity
Debt securities	-	-	-
Equity instruments	(19)	(75)	(354)
Subtotal	(19)	(75)	(354)
Credits to total equity (*)
Equity instruments	-	-	-
Debt securities and others	192	234	192
Subtotal	192	234	192
Total	173	159	(162)

(*) Tax asset credit to total equity due primarily to financial instruments losses.

21.4 Deferred taxes

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

Download Excel

Tax Assets and Liabilities	Millions of Euros
	2012	2011	2010
Tax assets-
Current	1,958	1,509	1,113
Deferred	9,871	6,332	5,536
Pensions	1,228	1,317	1,392
Portfolio	1,857	2,143	1,546
Other assets	277	257	234
Impairment losses	2,891	1,673	1,648
Other	1,212	636	699
Tax losses	2,406	306	17
Total	11,829	7,841	6,649
Tax Liabilities-
Current	1,194	772	604
Deferred	2,883	1,558	1,591
Portfolio	1,109	1,008	1,280
Charge for income tax and other taxes	1,774	549	311
Total	4,077	2,330	2,195

As of December 31, 2012, 2011 and 2010, the estimated balance of temporary differences in connection with investments in subsidiaries, branches and associates and investments in jointly controlled entities, for which no deferred tax liabilities have been recognized in the accompanying consolidated balance sheets, stood at €267 million, €527 million and €503 million, respectively.