48. Deferred income tax
48.1 Accounting policy
The level of deferred tax liabilities and assets is determined using the balance sheet method using the corporate income tax rates which are expected to be in effect when the asset or liability is realized, in accordance with the provisions of tax law in the countries of domicile of the individual PZU Group companies issued by the end of the reporting period.
For all of the consolidated companies participating in the Tax Group, deferred tax assets and liabilities are offset on the assumption that the Tax Group contract will be prolonged for subsequent periods, and therefore the period in which the reversal of temporary differences is expected is not analyzed for the purposes of this offsetting.
48.2 Estimates and assumptions
PZU Group companies have estimated their future taxable income in terms of the possibility to realize deductible temporary differences arising from tax losses incurred by these companies. As a result of these estimates, no deferred tax assets relating to unused tax loss were recognized.
48.3 Quantitative data
48.3.1. Deferred tax assets
| Unrecognized deferred tax assets resulting from the tax loss according to legally permissible realization term | 31 December 2021 | 31 December 2020 |
| up to 1 year | 13 | 6 |
| 1 to 5 years | 18 | 21 |
| over 5 years | 6 | 3 |
| term unlimited by law | 2 | 2 |
| Total | 39 | 32 |
| Movement in deferred tax assets in the year ended 31 December 2021 | Beginning of the period | Changes recognized in profit or loss | Changes recognized in other comprehen- sive income | Other changes | End of the period |
| Loan receivables from clients | 1 301 | -48 | 9 | - | 1 262 |
| Bank commissions collected in advance | 598 | -67 | - | - | 531 |
| Liabilities to clients under deposits | 26 | -15 | - | - | 11 |
| Intangible assets – trademarks and client relations | -199 | 3 | - | - | -196 |
| Financial instruments | 100 | -316 | 970 | - | 754 |
| Real property | -47 | 9 | - | -2 | -40 |
| Accrued reinsurance income and expenses | 15 | 7 | - | - | 22 |
| Provisions for employee benefits | 79 | -15 | -8 | - | 56 |
| Provisions for bonuses | 55 | 22 | - | - | 77 |
| Other provisions and liabilities | 530 | 33 | - | - | 563 |
| Tax losses to be used in subsequent years | 37 | -32 | - | - | 5 |
| Tax allowance for activities conducted in a special economic zone | - | - | - | 9 | 9 |
| Provision for restructuring costs | 16 | -12 | - | - | 4 |
| Total deferred tax assets | 2 511 | -431 | 971 | 7 | 3 058 |
| Movement in deferred tax assets in the year ended 31 December 2020 | Beginning of the period | Changes recognized in profit or loss | Changes recognized in other comprehen- sive income | Other changes | End of the period |
| Loan receivables from clients | 1 143 | 162 | -4 | - | 1 301 |
| Bank commissions collected in advance | 620 | -27 | - | 5 | 598 |
| Liabilities to clients under deposits | 68 | -42 | - | - | 26 |
| Intangible assets – trademarks and client relations | -246 | 47 | - | - | -199 |
| Financial instruments | 121 | 244 | -267 | 2 | 100 |
| Real property | -52 | 2 | - | 3 | -47 |
| Accrued reinsurance income and expenses | 18 | -3 | - | - | 15 |
| Provisions for employee benefits | 70 | 7 | 2 | - | 79 |
| Provisions for bonuses | 63 | -8 | - | - | 55 |
| Other provisions and liabilities | 468 | 47 | - | 15 | 530 |
| Tax losses to be used in subsequent years | 36 | - | - | 1 | 37 |
| Provision for restructuring costs | 4 | 12 | - | - | 16 |
| Total deferred tax assets | 2 313 | 441 | -269 | 26 | 2 511 |
48.3.2. Deferred tax liability
| Movement in deferred tax liabilities in the year ended 31 December 2021 | Beginning of the period | Changes recognized in profit or loss | Changes recognized in other comprehen- sive income | Other changes | End of the period |
| Financial instruments | 528 | 55 | -237 | 346 | |
| Subrogation receivables | 13 | 1 | - | - | 14 |
| Real property | 121 | 37 | - | -2 | 156 |
| Deferred acquisition costs | 292 | 46 | - | - | 338 |
| Accrued reinsurance income and expenses | -22 | -68 | - | - | -90 |
| Intangible assets – trademarks and customer relations | 68 | -5 | - | - | 63 |
| Provisions for employee benefits | -17 | -2 | -1 | - | -20 |
| Provision for bonuses | -52 | -10 | - | - | -62 |
| Liabilities due but not paid to natural persons (under mandate, agency contracts, etc.) | -72 | -5 | - | - | -77 |
| Other provisions and liabilities | -106 | 14 | - | - | -92 |
| Prevention fund | 11 | 1 | - | - | 12 |
| Equalization provision | 111 | 9 | - | - | 120 |
| Tax losses to be used in subsequent years | -19 | -5 | - | - | -24 |
| Other differences | 93 | 29 | - | - | 122 |
| Total deferred tax liabilities | 949 | 97 | -238 | -2 | 806 |
| Movement in deferred tax liabilities in the year ended 31 December 2020 | Beginning of the period | Changes recognized in profit or loss | Changes recognized in other comprehen- sive income | Other changes | End of the period |
| Financial instruments | 350 | 93 | 86 | -1 | 528 |
| Subrogation receivables | 8 | 5 | - | - | 13 |
| Real property | 75 | 56 | - | -10 | 121 |
| Deferred acquisition costs | 282 | 10 | - | - | 292 |
| Accrued reinsurance income and expenses | -6 | -16 | - | - | -22 |
| Intangible assets – trademarks and customer relations | 71 | -4 | - | 1 | 68 |
| Provisions for employee benefits | -18 | - | 1 | - | -17 |
| Provision for bonuses | -52 | - | - | - | -52 |
| Liabilities due but not paid to natural persons (under mandate, agency contracts, etc.) | -77 | 5 | - | - | -72 |
| Other provisions and liabilities | -104 | -4 | - | 2 | -106 |
| Prevention fund | 13 | -2 | - | - | 11 |
| Equalization provision | 144 | -33 | - | - | 111 |
| Tax losses to be used in subsequent years | -17 | -1 | - | -1 | -19 |
| Other differences | 77 | 19 | - | -3 | 93 |
| Total deferred tax liabilities | 746 | 128 | 87 | -12 | 949 |