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.

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Income taxes