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Income taxes

Income tax expense increased by CHF 48 million year-on-year, from CHF 271 million to CHF 319 million, cor­re­spond­ing to an effective income tax rate of 14.8% (prior year: 15.1%) The tax expense in 2021 was positively impacted by the low taxation of income from participations and the capitalisation of deferred tax assets in connection with a change in Italian tax laws. Swisscom anticipates a future effective con­sol­i­dated tax rate of 19.5%. The CHF 30 million decrease in income taxes paid to CHF 279 million was mainly due to the difference between the expense recorded and the payment of income taxes due.

In CHF million, except where indicated   Switzer­land   Italy   Other countries   Total
                 
2021 financial year
Income before income taxes   1,827   306   19   2,152
Income tax expense   339   (22)   2   319
Effective income tax rate   18.6%   –7.2%   10.5%   14.8%
                 
Income taxes paid   264   15     279
                 
2020 financial year
Income before income taxes   1,669   108   22   1,799
Income tax expense   242   25   4   271
Effective income tax rate   14.5%   23.1%   18.2%   15.1%
                 
Income taxes paid   299   10     309

Swisscom operates principally in Switzer­land and Italy, so the in­for­ma­tion on income taxes is divided into Switzer­land, Italy and other countries.