7. Tax

Income tax

2024
€’000

2023
€’000

Current tax credit

-

-

Deferred tax expense

(42,499)

(49,289)

Total income tax

(42,499)

(49,289)

Reconciliation of effective tax rate

Profit before tax

321,104

378,560

Taxed at 12.5% (2023: 12.5%)

(40,138)

(47,320)

Depreciation on capital expenditure that is not deductible for tax purposes

(1,727)

(1,406)

Other expenses not deductible for tax purposes

(202)

(139)

Income not taxable/taxable deductions

301

222

Income taxable at higher rates

(745)

(589)

Adjustments in respect of previous financial years

12

(57)

Total income tax expense

(42,499)

(49,289)

Refer to the statement of other comprehensive income for details of the tax impacts therein.

Deferred tax assets and liabilities

Notes

Pension obligations
€’000

Tax losses forward
€’000

Accelerated tax depreciation
€’000

Right-of-use assets
€’000

Lease liabilities
€’000

Other
€’000

Total
€’000

At 1 January 2023

990

102,483

(245,797)

(3,810)

3,876

(206)

(142,464)

Recognised in income statement

388

16,795

(66,548)

1,873

(1,929)

132

(49,289)

Recognised in other comprehensive income

1,210

-

-

-

-

-

1,210

Recognised in equity

25

105

-

-

-

-

-

105

At 31 December 2023

2,693

119,278

(312,345)

(1,937)

1,947

(74)

(190,438)

Recognised in income statement

477

32,399

(75,382)

108

(98)

(3)

(42,499)

Recognised in other comprehensive income

(992)

-

-

-

-

-

(992)

At 31 December 2024

2,178

151,677

(387,727)

(1,829)

1,849

(77)

(233,929)

Pillar Two model rules

Taxation is calculated at the prevailing standard corporation tax rate of 12.5% for the financial year end 2024.

On 18 December 2023 the Government of Ireland, enacted the Pillar Two income taxes legislation into Finance (No.2) Act 2023 which allows for a minimum effective tax rate of 15% to be applied to companies in the State subject to certain conditions. As Uisce Éireann is a standalone entity with no international activity and is not owned by any parties outside of the Republic of Ireland the legislation allows for a deferral period of five years. As a result, it is expected that Uisce Éireann will not be subject to Pillar Two rules until the financial year commencing 1 January 2029.

The Company continues to assess the impact of the Pillar Two income taxes legislation on its future financial performance.