Financial statements

NOTE 16



TAX AND SOCIAL SECURITY RECEIVABLES AND PAYABLES

The composition of the current tax and social security payables and receivables at 31 December 2018 is as follows:

16.1 Current tax and social security receivables and payables


(Euros) - 2018
Balance at 31/12/2018
Receivable
Balance at 31/12/2018
Payable
Balance at 31/12/2017
Receivable
Balance at 31/12/2017
Payable
Social Security bodies 0 552.399 0 539.660
Andorran Social Security Authority 0 552.399 0 539.660
Tax Agency 574.698 833.142 240.134 4.298.958
Indirect taxes 0 352.539 0 283.708
Corporate income tax 331.202 0 0 3.073.124
Personal income tax withholdings pending payment 0 31.883 0 27.480
Non-resident income tax pending payment 0 140.558 0 179.298
Deferred tax assets 243.235 0 239.812 0
Tax and other payables (payments in kind) 0 308.162 0 735.349
Others 261 0 321 0

The amount recorded under the Corporate income tax heading includes an amount pending reimbursement by the Tax Authority based on the payment in advance for 2018 in the amount of 1,930,976.18 euros and the effective corporate income tax payable for the year.
16.2 Reconciliation between accounting profit and corporate income tax expense

The reconciliation between the Company’s accounting profit and profit for the purposes of corporate income tax at 31 December 2018 is as follows:

(Amounts in euros) Balance at 31/12/18 Balance at 31/12/17
Income before taxes 20.074.545 55.991.192
+ Permanent differences 533.705 292.882
+ Timing differences 34.227 -6.277.743
Taxable income 20.642.477 50.006.330
x tax rate 10% 2.064.248 5.000.633
Gross payable 2.064.248 5.000.633
- Deductions and credits -580.783 -1.138.681
Total estimated tax payable for 2018 1.483.464 3.861.952
Differences for deferred tax assets and liabilities -3.423 627.774
Other adjustments (*) 116.309 550.036
Accrued tax for the year 1.596.351 5.039.762
Corrections for previous years charged to profit for the period 0 0
Corporate income tax expense 1.596.351 5.039.762

(*) The other adjustments correspond to the application of the 5% tax credit on investments retired prior to the five-year period established in the Corporate Income Tax Law. They also include an adjustment on deductions for creating new jobs, as the average workforce at 31 December 2018 slightly decreased with respect to 2017.


16.3 Years open to review for corporate income tax

Under Andorran tax law, tax liabilities cannot be considered definitively settled until either the tax returns filed have been inspected by the tax authorities or the statutory three-year limitation period has expired. Therefore, the Company has the last four years open to inspection for corporate income tax and the last three years for all the other taxes that are applicable to it.

The Company’s Directors believe that the settlements of those taxes have been done properly, so, even if differences were to arise in the interpretation of the regulations governing the tax treatment of its operations, such liabilities as could arise would not have a material effect on the accompanying financial statements.