Income tax payables include liabilities for uncertain tax positions for an amount of € 155 million (2019: € 145 million). There has been a net increase in 2020 of liabilities resulting from remeasurement and roll-forward of existing tax risks and reversal of tax risks based on expiry of statutes of limitation and closing of tax audits, all reflecting the tax-technical merits of the case and the state of discussions with tax authorities upon tax audit (where appropriate). Liabilities for uncertain tax positions are recorded when the Group considers it probable that a tax position taken is unlikely to be sustained if challenged by the tax authorities and after exhausting all legal remedies.
The income tax receivable includes assets for tax relief following Mutual Agreement procedures for an amount of € 25 million (2019: € 18 million). Assets for relief following Mutual Agreements that a Mutual Agreement procedure may provide for a corresponding adjustment in one or more jurisdictions.
The assessment for both the uncertain tax positions and corresponding adjustments is calculated taking into account the most likely outcome (for corporate income tax related matters) or the expected value (for corporate tax or transfer pricing related matters), where appropriate and in line with IFRIC 23. See Note 4.2.5 for more details on the Group’s assessment of uncertain tax positions. This means that, on a net basis, the group has provided for a reserve of € 130 million (2019: € 127 million) to cover for uncertain tax positions and engages into the necessary procedures to secure tax relief where possible.
UCB faces tax audits in a number of countries where activities are deployed. The issues under discussion are in some cases complex and such audits can take a number of years to resolve. The Group strictly follows up on the liabilities for uncertain tax positions which are recorded per end 2020, also reflecting the status of the ongoing tax audits.