REC Silicon Annual Report 2019

63 Notes to the consolidated financial statements, REC Silicon Group REC Silicon Annual Report 2019 The nominal interest rates and currency distribution (notional amounts) at December 31, 2019 were as follows INTERESTRATE (%) CURRENCY AMOUNTS IN MILLION BORROWER USD Senior Secured Bond 11.50 Fixed USD 110.0 REC Silicon ASA Indemnification loans 2.00 Variable NOK 200.0 REC Silicon ASA The nominal interest rates and currency distribution (notional amounts) at December 31, 2018 were as follows INTERESTRATE (%) CURRENCY AMOUNTS IN MILLION BORROWER USD Senior Secured Bond 11.50 Fixed USD 110.0 REC Silicon ASA Indemnification loans 2.00 Variable NOK 200.0 REC Silicon ASA INCOME TAX EXPENSE AND DEFERRED TAX ASSETS AND LIABILITIES Recognized income tax expense (USD INMILLION) 2019 2018 Current income tax expense (-) / benefit (+) 0.0 6.0 Deferred tax expense (-) / benefit (+) 0.0 0.4 Total income tax expense (-) / benefit (+) in the statement of income 0.0 6.5 Relationship of income tax expense/benefit to profit/loss from continuing operations (USD INMILLION) 2019 2018 Profit/loss before tax -127.0 -348.0 Tax calculated at domestic tax rates applicable to profits /losses in the respective countries 32.5 93.7 Effects of changes in tax rates and use of another tax rate for parts of profits /losses 0.6 -12.3 Associated companies -9.2 0.8 Expenses not deductible for tax purposes -0.1 -0.9 Effects of not recognized deferred tax assets, including reversal of previous years -23.4 -73.4 Change in estimates of prior years income taxes 0.0 6.0 Other permanent differences -0.4 -7.4 Total income tax expense (-) / benefit (+) in the statement of income 0.0 6.5 Effective tax rate 0% 2% The income tax benefit of USD6.5million in 2018was related to the anticipated refund of AlternativeMinimumTax in the United States for USD6.0million andUSD0.4million associatedwith the settlement of RECSilicon’s commitment to contribute equity to theYulin JV. Other permanent differences in 2019 and in 2018 are related to tax calculations in RECSilicon ASAwhere the tax balances are denominated in NOK and the Financial Statements are in USD. This gives rise to differences in profit/loss between the tax calculation and the Financial Statement. The income tax calculation for the Group is primarily based on blended corporate income tax rates of 22 percent in Norway and approximately 22.7 percent in the USA. Income tax for RECSilicon in the USA is based on nominal 21 percent federal tax rate plus estimated state taxes. The effective tax rate for REC Silicon in the USAwas 0 percent in 2019 and -1.0 percent in 2018. 18