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Annual Report & Accounts 2016 - Notes
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85 6. TAXATION 6.1 Analysis of tax charge 2016 €m 2015 €m CURRENT TAX EXPENSE Current year 12.5 0.7 Prior year (0.7) 0.1 Current tax expense 11.8 0.8 Deferred tax credit (11.8) - TAX (CREDIT) EXPENSE - 0.8 The effective tax rate for the year based on the associated tax expense is 0.0% (2015: tax rate of 3.1%). The total (credit) expense for the year can be reconciled to accounting (loss) profit as follows: 2016 €m 2015 €m (LOSS) PROFIT BEFORE TAX (138.6) 25.5 Income tax using the UK corporation tax rate (27.7) 5.2 Effect of tax rates in foreign jurisdictions (rates decreased) 0.7 (4.8) Expenses/(income) not deductible for tax purposes 16.6 0.8 Utilisation of tax losses not previously provided (1.0) (0.2) Group relief (2.5) - Tax losses for which no deferred tax assets have been recognised 15.2 0.6 Capital allowances for the period in excess of depreciation (0.6) (0.9) Adjustments in respect of prior years (0.7) 0.1 - 0.8 The expenses not allowed for tax purposes are primarily share-based payments, depreciation, amortisation and impairment of assets. The effect of non-taxable income primarily represents the release of the acquisition fair value tax liability and dividend income. 6.2 Factors affecting the tax charge for the year The Group's policy is to manage, control and operate Group companies only in the countries in which they are registered. At the year end there were Group companies or branches registered in 30 countries. However, the rules and practice governing the taxation of e-commerce activity are evolving in many countries. It is possible that the amount of tax that will eventually become payable may differ from the amount provided in the financial statements. 6.3 Factors that may affect future tax charges As the Group is involved in worldwide operations, future tax charges will be affected by the levels and mix of profitability in different jurisdictions. Future tax charges will be reduced by a deferred tax credit in respect of amortisation of certain acquired intangibles.