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30. Income taxes

Income taxes can be broken down as follows:

 20162015
IRES (corporate income tax)(14)-
IRAP (reg. tax on production)(23)(26)
Other income taxes (foreign)(65)(88)
Tax related to previous periods47
Provisions for tax disputes(36)(79)
Deferred tax - net(24)(7)
 (158)(193)

Following is an analysis of the difference between the theoretical and effective tax rate for 2016 and 2015:

 20162015
Profit (loss) before income taxes665720
Percentage impact of Italian and foreign taxes  
IRES (net of tax receipts)2.1%n.a.
IRAP (reg. tax on production)3.5%3.6%
Other income taxes (foreign)9.8%12.2%
Substitute taxes  
Tax related to previous periods(0.6%)(1.0%)
Provisions for tax disputes5.4%11.0%
Deferred tax - net3.6%1.0%
Effective rate23.8%26.8%

Deferred taxes and related receivables and payables at 31 December 2016 were the result of the following temporary differences. In this regard, we point out that part of the deferred tax assets relate to tax losses valued on the basis of the taxable income envisaged in the companies’ plans, in particular €mil. 164 is related to the tax consolidation mechanism (about €bil. 0.8 of unrecognised losses).

 20162015
 Income statementIncome statement
 IncomeExpencesNetIncomeExpencesNet
Deferred tax assets on tax losses78661232527
Property, plant and equipment and intangible assets501931552035
Financial assets and liabilities14(3)-13(13)
Severance and retirement benefits-8(8)216(14)
Provision for risks and impairment116163(47)182189(7)
Effect of change in tax rate(9)(2)(7)(66)(20)(46)
Other7880(2)998811
Deferred taxes recognised through profit or loss314338(24)304311(7)

 31 December 201631 December 2015
 Balance sheetBalance sheet
 AssetsLiabilitiesNetAssetsLiabilitiesNet
Deferred tax assets on tax losses311-311299-299
Property, plant and equipment and intangible assets77239(162)59290(231)
Severance and retirement benefits827(19)413
Financial assets and liabilities---521(16)
Provision for risks and impairment646-646665-665
Other97105(8)1287157
Offsetting(38)(38)-(116)(116)-
Deferred taxes recognised through balance sheet1,1013337681,044267777
       
Cash-flow hedge derivatives31130817
On actuarial gains and losses9957421075750
Deferred taxes recognised through equity13058721155857
 1,2313918401,159325834