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 2019 and 2018 is as follows:

16.1 Current tax and social security receivables and payables


(Euros) - 2019
Balance at 31/12/2019
Receivable
Balance at 31/12/2019
Payable
Balance at 31/12/2018
Receivable
Balance at 31/12/2018
Payable
Social Security bodies 0 552.399 0 552.399
Andorran Social Security Authority 0 551.698 0 552.399
Tax Agency 871.639 6.018.484 574.698 833.142
Indirect taxes 0 363.139 0 352.539
Corporate income tax 0 1.574.574 331.202 0
Personal income tax withholdings pending payment 0 34.404 0 31.883
Non-resident income tax pending payment 0 3.110.430 0 140.558
Deferred tax assets 871.451 627.774 0 140.558
Tax and other payables (payments in kind) 0 308.162 308.162
Others 187 0 261 0

The amount recorded under the Corporate income tax heading includes the net amount to be paid to the Tax Authority based on the payment in advance for 2019 in the amount of 741,732.15 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 2019 and 2018 is as follows:

(Amounts in euros) Balance at 31/12/19 Balance at 31/12/18
Income before taxes 35.614.357 20.074.545
+ Permanent differences -6.052.057 533.705
+ Timing differences 4.419 34.227
Taxable income 29.566.719 20.642.477
x tax rate 10% 2.956.672 2.064.248
Gross payable 2.956.672 2.064.248
- Deductions and credits -722.208 -580.783
Total estimated tax payable for 2019 2.234.464 1.483.464
Differences for deferred tax assets and liabilities -442 -3.423
Other adjustments (*) 81.842 116.309
Accrued tax for the year 2.315.865 1.596.351
Corrections for previous years charged to profit for the period 7.652 0
Corporate income tax expense 2.323.516 1.596.351

(*) 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.

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.