14. Taxes on income and profit

OMV Aktiengesellschaft forms a tax group in accordance with Section 9 of the Austrian Corporate Income Tax Act 1988 (KStG), which aggregates the taxable profits and losses of all the Group’s main subsidiaries in Austria and possibly arising losses of one foreign subsidiary (OMV AUSTRALIA PTY LTD).

Dividend income from domestic subsidiaries is in general exempt from taxation in Austria. Dividends from EU and EEA participations as well as from subsidiaries whose country of residence has a comprehensive mutual administrative assistance agreement with Austria are exempt from taxation in Austria if certain conditions are met. Dividends from other foreign investments that are comparable to Austrian corporations, for which the Group holds a 10% investment share or more for a minimum period of one year, are also excluded from taxation at the level of the Austrian parent company.

The change in the valuation allowance of deferred taxes for the Austrian tax group was reported in the income statement, except to the extent that the DTA arose from transactions or events that were recognized outside profit or loss, i.e., in other comprehensive income or directly in equity.

Solidarity contribution

Based on the EU Council Regulation 2022/1854, a solidarity contribution was introduced and was transposed into the local law of the member states. It represents a contribution for surplus profits of companies operating in the crude petroleum, natural gas, coal, and refinery sectors and was applicable for 2022 and 2023.

In January 2024, despite the EU rules expiring at the end of 2023, the Austrian federal government decided to extend the solidarity contribution retroactively into 2024. The solidarity contribution (Energy Crisis Contribution) is calculated based on the taxable profits of the relevant companies, as determined under the Austrian national tax rules, that are more than 5% higher (2023: 10% higher) than the average taxable profits generated in the period 2018 to 2021. OMV Group companies in Austria were not subject to a solidarity contribution in 2024, as the taxable profit of the relevant companies did not exceed the average taxable profit generated in the period 2018 to 2021.

Details with respect to the solidarity contribution in Romania are provided in Note 2 – Accounting policies, judgments, and estimates.

Global minimum tax

In December 2023, the Pillar Two legislation (Mindestbesteuerungsgesetz) effective from January 1, 2024, was enacted in Austria, where the ultimate parent company of the Group is incorporated. Under this legislation, Group companies are subject to Pillar Two income taxes on profits that are taxed at an effective tax rate of less than 15%. Certain subsidiaries of the Group are subject to a qualified domestic minimum tax in the countries where Pillar Two rules were transposed into national law.

The Group has performed a preliminary calculation of transitional safe harbors for Pillar Two purposes. Based on the preliminary safe harbor calculation and the detailed Pillar Two calculation for those jurisdictions not qualifying for the safe harbors, no material exposure to Pillar Two income taxes is expected. The relevant jurisdictions in which insignificant exposure to Pillar Two taxes exist are Bulgaria and Moldova, where the statutory tax rates are 10% and 12%, respectively, as well as Gibraltar where the statutory tax rate was 12.5% for the first half of 2024 and afterwards increased to 15%.

Effective tax rate

The effective tax rate is the ratio of income tax to profit before tax. The tables below reconcile the effective tax rate and the standard Austrian corporate income tax rate of 23% (2023: 24%) showing the major influencing factors.

Differing foreign tax rates effects in 2024 mostly related to subsidiaries operating in tax jurisdictions with high corporate income tax rates (Norway, United Arab Emirates, and Libya). The decrease in the effects related to differing foreign tax rates compared to 2023 was mostly due to the lower profit before tax of those subsidiaries.

Non-deductible expenses related mostly to the impairment of an oil and gas asset in the Energy segment for which the divestment process was initiated in 2024, and the gross-up effects related to exploration and production sharing agreements. 2023 was predominantly impacted by the solidarity contribution on refined crude oil in Romania.

Non-taxable income and tax incentives in 2024 mainly related to government grants and investment allowances, while in 2023 those effects related mostly to the write-up of tangible assets.

Income and expenses related to equity-accounted investments effects in 2024 and 2023 were mainly related to the share of profit from equity-accounted investments.

Non-recognition and changes in valuation allowance of DTA in 2023 was mainly impacted by the increase in valuation allowance on DTA in Austria.

Other effects in 2024 related mostly to hybrid bond interest. 2023 was predominantly impacted by the reversal of outside basis differences with respect to Nitro business and tax credits.

Deferred taxes

Deferred taxes were mainly related to different valuation methods, differences in impairments, write-offs, write-ups, and depreciation and amortization, as well as different definitions of costs.

The decrease in DTL related to assets and liabilities associated with assets held for sale was entirely driven by the divestment of SapuraOMV. For further details see Note 5 – Assets and liabilities held for sale.

As of December 31, 2024, deductible temporary differences for which no DTA was recognized amounted to EUR 960 mn (2023: EUR 929 mn).

The overall net DTA position of tax jurisdictions that suffered a tax loss either in the current or preceding year amounted to EUR 10 mn (2023: EUR 503 mn, of which Austrian tax group EUR 464 mn).

Tax loss carryforwards

As of December 31, 2024, OMV recognized tax loss carryforwards of EUR 6,108 mn before allowances (2023: EUR 6,257 mn), of which EUR 1,539 mn (2023: EUR 1,842 mn) is considered recoverable for the calculation of deferred taxes.

The eligibility of losses to be carried forward expires as follows:

In certain tax jurisdictions local tax laws stipulate limitations on the usage of tax losses carried forward. These limitations range from 50% up to 80% of the taxable profit for the year. As of December 31, 2024, tax loss carryforwards related to tax jurisdictions with the aforementioned limitations amounted to EUR 5,725 mn (2023: EUR 5,813 mn), of which EUR 1,470 mn (2023: EUR 1,717 mn) is considered recoverable for the calculation of deferred taxes.

The majority of tax loss carryforwards not recognized referred to the Austrian tax group and France.

Outside basis differences

As of December 31, 2024, the aggregate amount of temporary differences associated with fully consolidated and equity-accounted investments for which deferred tax liabilities have not been recognized amounted to EUR 9,667 mn (2023: EUR 9,317 mn). The exception criteria as per IAS 12 for not recognizing these deferred tax liabilities is deemed to be fulfilled due to the fact that the Group is able to control or influence the relevant decisions with respect to the timing of the reversal and it is not probable that temporary differences will reverse in the foreseeable future or the Group intends to reinvest undistributed profits. Capital gains on disposals of investments may be realized on various levels of the Group depending on the structuring of potential divestments. Due to the complexity of the Group and the associated tax implications, simplifying assumptions for the calculation have been made that aim to diminish cascade effects.