13. Income tax

(i) Income tax expense

	for the year ended
	31 December 2016	31 December 2015
Current tax expense	126.4	270.6
Change in deferred tax	(98.2)	(100.0)
Correction of income tax returns of previous years	(15.8)	(1.6)
Income tax expense in the income statement	12.4	169.0

note_13.i_-_income_tax.xlsx

	for the year ended
Change in deferred income tax	31 December 2016	31 December 2015
Tax losses carried forward	(157.5)	22.4
Receivables and other assets	(33.0)	(4.1)
Liabilities	215.1	(28.0)
Other property, plant and equipment and intangible assets	(136.2)	(119.0)
Other	13.4	28.7
Change in deferred tax recognized in income statement – total	(98.2)	(100.0)

note_13.i_-_income_tax.xlsx

(ii) Income tax recognized in the statement of other comprehensive income

	for the year ended
	31 December 2016		31 December 2015
Change in deferred income tax on hedge valuation	1.9	1.1
Income tax expense recognized in other comprehensive income - total	1.9	1.1

note_13.ii_-_income_tax.xlsx

(iii) Effective tax rate reconciliation

	for the year ended
	31 December 2016	31 December 2015
Gross profit	1,033.4	1,332.4
Income tax at applicable statutory tax rate of 19%	196.3	253.2
Tax amortization of intangible assets	(17.2)	(8.9)
Permanent differences on a transaction eliminated on consolidation	(104.3)	-
Other	(62.4)	(75.3)
Tax expense for the year	12.4	169.0
Effective tax rate	1.2%	12.7%

note_13.iii_-_income_tax.xlsx

(iv) Deferred tax assets

	31 December 2016	31 December 2015
Tax losses carried forward	195.2	9.8
Liabilities	401.9	502.0
Tangible assets	114.7	76.0
Receivables and other assets	51.0	49.3
Other	2.7	14.0
Total deferred tax assets	765.5	651.1
Set off of deferred tax assets and liabilities	(532.8)	(563.5)
Deferred tax assets in the balance sheet	232.7	87.6

note_13.iv_-_income_tax.xlsx

(v) Tax loss

	31 December 2016	31 December 2015
2016 tax loss carried forward	666.7	-
2015 tax loss carried forward	269.7	6.6
2014 tax loss carried forward	35.2	22.9
2013 tax loss carried forward	51.6	4.5
2012 tax loss carried forward	67.8	24.4
2011 tax loss carried forward	29.2	18.6
Tax losses carried forward – total	1,120.2	77.0

note_13.v_-_income_tax.xlsx

(vi) Tax losses recognized

	31 December 2016	31 December 2015
2016 tax loss carried forward	664.3	-
2015 tax loss carried forward	246.7	4.1
2014 tax loss carried forward	4.3	22.9
2013 tax loss carried forward	48.8	4.5
2012 tax loss carried forward	61.4	14.8
2011 tax loss carried forward	29.2	4.8
Tax losses carried forward – total	1,054.7	51.1

note_13.vi_-_income_tax.xlsx

As at 31 December 2016 the Group recognized deferred tax asset on tax losses to the extent that it was probable that they would be utilized in the future.

According to Art. 7 of the Polish Corporate Income Tax Act dated 15 February 1992, tax losses incurred in a given financial year can be utilized in the subsequent five fiscal years. However, no more than 50% of a tax loss for any given year can be utilized in a single subsequent fiscal year.

(vii) Deferred tax liabilities

	31 December 2016	31 December 2015
Receivables and other assets	73.6	76.9
Liabilities	12.5	10.4
Tangible and intangible assets	1,170.3	1,033.2
Other	63.3	58.8
Total deferred tax liabilities	1,319.7	1,179.3
Set off of deferred tax assets and liabilities	(532.8)	(563.5)
Deferred tax liabilities in the balance sheet	786.9	615.8

note_13.vii_-_income_tax.xlsx

The tax authorities may at any time inspect the books and records within 5 years from the end of the year when a tax declaration was submitted, and may impose additional tax assessments with penalty interest and penalties. The Group's management is not aware of any circumstances, which may give rise to a potential material liability in this respect.