8.2 Effective tax rate

The reconciliation of income tax on the gross financial result before tax at the statutory interest rate with income tax calculated according to the tax rate applicable to the Group is as follows:

Year ended
December 31, 2020
Year ended
December 31, 2019
PROFIT/(LOSS) BEFORE TAX 314 (4,703)
Tax at statutory rate effective in Poland – 19% 60 (894)
ITEMS ADJUSTING INCOME TAX
Adjustments to deferred income tax 5 (10)
Non-deductible costs 139 65
Creation of rehabilitation provisions with respect to which no deferred tax was recognised 15 110
Non-taxable income (27) (9)
Other adjustments (26) (37)
INCOME TAX EXPENSE AT EFFECTIVE TAX RATE
Income tax (charge) in the consolidated financial statements
166 (775)
EFFECTIVE TAX RATE 53% 16%

The increase in non-deductible costs is mainly due to the write-down on PGG S.A. shares made in 2020.

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