AEGON NV (ifrs-full:DisclosureOfDeferredTaxesExplanatory)

43 Deferred tax


	2017		2016
Deferred tax assets		79		87
Deferred tax liabilities		1,029		2,201
Total net deferred tax liability / (asset)		950		2,113


Deferred tax assets comprise temporary differences on:	2017			2016
Financial assets		(20	)		(22	)
Insurance and investment contracts		(19	)		(55	)
Deferred expenses, VOBA and other intangible assets		(140	)		(148	)
Defined benefit plans		26			54
Losses		176			221
Other		57			37
At December 31		79			87


Deferred tax liabilities comprise temporary differences on:	2017			2016
Real estate		554			541
Financial assets		1,724			3,143
Insurance and investment contracts		(1,806	)		(3,042	)
Deferred expenses, VOBA and other intangible assets		1,752			3,150
Defined benefit plans		(268	)		(592	)
Losses		(120	)		(188	)
Other		(807	)		(812	)
At December 31		1,029			2,201

The following table provides a movement schedule of net deferred tax broken-down by those items for which a deferred tax asset or liability has been recognized.


	LOGO			LOGO			LOGO			LOGO			LOGO			LOGO			LOGO			LOGO
At January 1, 2017		541			3,165			(2,988	)		3,298			(645	)		(407	)		(850	)		2,113
Acquisitions / Additions		-			-			-			9			-			(1	)		(14	)		(6	)
Charged to income statement		37			32			609			(1,016	)		120			78			(62	)		(202	)
Charged to equity		(9	)		(874	)		-			-			174			-			(5	)		(715	)
Net exchange differences		(16	)		(270	)		241			(322	)		57			27			111			(172	)
Disposal of a business		-			-			-			2			-			-			-			2
Transfers to disposal groups		-			-			-			-			-			8			-			8
Transfer to current income tax		-			-			-			-			-			-			(73	)		(73	)
Transfer to/from other headings		-			(300	)		351			(79	)		-			-			27			-
Other		-			(9	)		-			-			-			-			2			(7	)
At December 31, 2017		554			1,744			(1,787	)		1,892			(295	)		(296	)		(863	)		950

At January 1, 2016		434			2,735			(2,500	)		3,008			(688	)		(500	)		(261	)		2,227
Charged to income statement		99			596			(380	)		222			135			57			(543	)		185
Charged to equity		3			(264	)		(2	)		2			(85	)		-			(2	)		(350	)
Net exchange differences		5			84			(108	)		69			(6	)		34			(45	)		34
Transfer to current income tax		-			16			-			-			-			-			-			16
Other		-			(1	)		2			(3	)		(1	)		1			3			-
At December 31, 2016		541			3,165			(2,988	)		3,298			(645	)		(409	)		(849	)		2,113

The decrease of the United States corporate income tax rate from 35% to 21% as from January 1, 2018 with an impact of total EUR 1,034 million, EUR 554 million through profit and loss and EUR 479 million through other comprehensive income (refer to note 18) is the main cause for the total decrease in the deferred tax liability in 2017 of EUR 1,163 million.

The transfer to current income tax relates to transfers from deferred to current tax, in relation to own equity instruments.

Transfer to/from other headings in 2017 includes transfers between two reporting segments.

In 2016, there were considerable movements in the net deferred tax schedule. The major components consisted of:

◆

The increase of deferred tax liability primarily related to an increase of unrealised profits in respect of financial assets mainly driven by tightening credit spread

◆

The movement in Insurance contracts and Intangible assets mainly related to the reclassification through these categories

◆

The increase in Other mainly related to the deferral tax credits in 2016

Deferred corporate income tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. For an amount of gross EUR 85 million; tax EUR 15 million (2016: gross EUR 505 million; tax EUR 90 million) the realization of the deferred tax asset is dependent on the projection of future taxable profits from existing business in excess of the profits arising from the reversal of existing taxable temporary differences.

For the following amounts, arranged by loss carry forward periods, the deferred corporate income tax asset is not recognized:


	Gross amounts¹⁾				Not recognized deferred tax assets
	2017		2016		2017		2016
< 5 years		89		101		22		26
> 5 – 10 years		137		130		18		16
> 10 – 15 years		-		1		25		33
> 15 – 20 years		-		-		-		-
Indefinitely		499		396		111		94
At December 31		725		628		177		170

¹	The gross value of state tax loss carry forward is not summarized in the disclosure, due to the fact that the United States files in different state jurisdictions with various applicable tax rates and apportionment rules

Deferred corporate income tax assets in respect of deductible temporary differences are recognized to the extent that the realization of the related tax benefit through future taxable profits is probable. For the following amounts relating to Defined benefit plans and Other items the recognition of the deferred corporate income tax asset is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences:


	Gross amounts				Deferred tax assets
	2017		2016		2017		2016
Deferred corporate income tax asset dependent on retaining bonds and similar investments until the earlier of market recovery or maturity¹⁾		-		816		-		286
Deferred corporate income tax asset dependent on future taxable profits		261		362		46		64
At December 31		261		1,179		46		350

The amendment of IAS 12, relating to deferred tax assets on unrealized losses, changed the qualification by Aegon of ‘holding bonds and similar investments until the earlier of market recovery or maturity’ from a tax planning opportunity into a source of income with no impact on the figures presented.

Aegon did not recognize deferred corporate income tax assets in respect of deductible temporary differences relating to Financial assets and Other items for the amount of gross EUR 43 million; tax EUR 8 million (2016: gross EUR 70 million; tax EUR 13 million).

Deferred corporate income tax liabilities have not been recognized for withholding tax and other taxes that would be payable on the unremitted earnings of certain subsidiaries. The unremitted earnings totaled gross EUR 1,771 million; tax EUR 441 million (2016: gross EUR 1,770 million; tax EUR 441 million).

All deferred corporate income taxes are non-current by nature.

AEGON NV | CIK:0000769218 |

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