IBERSOL | 2019 Annual Report

Consolidated Financial Statements 28. INCOME TAX Income tax recognised in the years 2019 and 2018 are broken down as follows: 2019 2018 Current taxes 4 490 712 2 720 113 Income tax provision (Note 19) -3 211 467 - Insufficiency (excess) of income tax -705 133 -73 338 Deferred taxes -5 895 887 1 423 534 -5 321 775 4 070 309 The group’s income tax prior to taxes is not the same as the theoretical amount that would result from applying the mean weighted income tax rate to the consolidated profit, as follows: 2019 2018 Pre-tax profit 12 318 035 29 141 059 Tax calculated at the appliacble tax rate in Portugal (22,5%) 2 771 558 6 556 738 Fiscal effect caused by: Income tax provisions -3 211 467 - Insufficiency (excess) of income tax -705 133 -73 338 Tax credits (CFI) -3 136 787 -3 871 869 Deferred tax credits -1 340 281 60 814 Special tax (independent) 521 954 416 550 Tax pours 212 372 192 166 Deferred tax adjustments and other effects -433 992 789 248 Income Tax Expenses -5 321 775 4 070 309 The effective rate of taxes on profits in 2018 was 14%, being lower than the nominal rate due, essentially, to the tax credits obtained under the terms of the Investment Tax Code (CFI), attached to Decree-Law No. 162/2014, of 31 October. In 2019 the income tax expense is lower than the tax credits used (CFI). 280