technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 5 INCOME TAX

Income tax

NOTE 5

Under French tax law, Technicolor SA is the head Company of the income tax they would have paid if they were taxable separately on a French tax consolidation group consisting in 16 companies. Therefore, standalone basis.

Technicolor SA is responsible to the French Tax Authorities for all corporate income tax matters and is allowed to collect from other members of the French tax consolidation group the amount of corporate

The Company tax losses to carry forward indefinitely by the French tax consolidation group are estimated at €1,683 million as of December 31, 2018 due mainly to the Cathode Ray Tubes activity disposed in 2005.

Breakdown of booked income tax

5.1

2018

2017

(in million euros)

52 16 (8)

26 19 (4) (4)

Income tax booked by French subsidiaries and passed on to Technicolor SA (1)

Subsidiaries’ research tax credit

Provision for tax-integrated companies

Unused foreign tax credits

-

Other (2)

(15)

(14)

TOTAL INCOME TAX 23 Under French consolidation regime, Technicolor gets a tax income from consolidated French subsidiaries, in particular towards Thomson Licensing SAS (€38 million). (1) Corresponds mainly to research tax credit to be repaid to subsidiaries. The amount to be received for the tax credit to boost competitiveness and employment (CICE) is not (2) significant for 2018. The provision for the income tax expense under tax consolidation for 2018 will be offset mainly with foreign withholding tax credits and research tax credits. In the absence of tax integration, the Company would show a nil net income tax expense. Variation of deferred or latent tax bases 5.2 Temporarily non-deductible expenses related to Technicolor SA are the following: 45

December 31, 2018

December 31, 2017

Variation

(in million euros)

To be deducted the following year • Paid vacations

2 7 2 3 6 5 7

-

2 5 2

6

Provisions for risks

(2)

Other

-

To be deducted at a later date • Provisions for retirement

-

3

Provisions for subsidiary risks Depreciation on current accounts

(6)

-

1

6 6

Provisions for risks

(1)

Other

14

3

17

259

TECHNICOLOR REGISTRATION DOCUMENT 2018