Income taxes (Tables)

12 Months Ended

Oct. 31, 2018

Total income taxes


$ millions, for the year ended October 31	2018 ⁽¹⁾			2017			2016
Consolidated statement of income
Provision for current income taxes
Adjustments for prior years	$	(39	)	$	(19	)	$	(44	)
Current income tax expense		1,392			1,160			782
		1,353			1,141			738
Provision for deferred income taxes
Adjustments for prior years		32			6			13
Effect of changes in tax rates and laws		87			3			(11	)
Origination and reversal of temporary differences		(50	)		12			(22	)
		69			21			(20	)
		1,422			1,162			718
OCI		42			166			(263	)
Total comprehensive income	$	1,464		$	1,328		$	455

(1)	Excludes loss carryforwards that were recognized directly in retained earnings relating to foreign exchange translation amounts on CIBC’s net investment in foreign operations. These amounts were previously reclassified to retained earnings as part of our transition to IFRS in 2012.

Components of income tax


$ millions, for the year ended October 31	2018		2017			2016
Current income taxes
Federal	$	686	$	683		$	394
Provincial		467		451			259
Foreign		188		127			45
		1,341		1,261			698
Deferred income taxes
Federal		54		52			(129	)
Provincial		36		33			(89	)
Foreign		33		(18	)		(25	)
		123		67			(243	)
	$	1,464	$	1,328		$	455

Reconciliation of income taxes


$ millions, for the year ended October 31	2018					2017					2016
Combined Canadian federal and provincial income tax rate applied to income before income taxes	$	1,777		26.5	%	$	1,558		26.5	%	$	1,328		26.5	%
Income taxes adjusted for the effect of:
Earnings of foreign subsidiaries		(220	)	(3.3	)		(137	)	(2.3	)		(152	)	(3.0	)
Tax-exempt income		(203	)	(3.0	)		(219	)	(3.7	)		(348	)	(7.0	)
Disposition		(1	)	–			(26	)	(0.4	)		(76	)	(1.5	)
Changes in income tax rate on deferred tax balances		88		1.3			3		–			(11	)	(0.2	)
Impact of equity-accounted income		(29	)	(0.4	)		(25	)	(0.4	)		(24	)	(0.5	)
Other		10		0.1			8		0.1			1		–	⁽¹⁾
Income taxes in the consolidated statement of income	$	1,422		21.2	%	$	1,162		19.8	%	$	718		14.3	%

(1)	Due to rounding.

Deferred income taxes

Sources of and movement in deferred tax assets and liabilities

Deferred tax assets


$ millions, for the year ended October 31		Allowance for credit losses		Buildings and equipment			Pension and employee benefits			Provisions			Financial instrument revaluation			Tax loss carry- forwards ⁽¹⁾			Unearned income			Other			Total assets
2018	Balance at beginning of year under IAS 39	$	245	$	69		$	559		$	47		$	124		$	18		$	105		$	2		$	1,169
	Impact of adopting IFRS 9 at November 1, 2017		7		–			–			–			20			–			–			–			27
	Balance at beginning of year under IFRS 9		252		69			559			47			144			18			105			2			1,196
	Recognized in net income		31		(53	)		(45	)		(31	)		(60	)		20			22			–			(116	)
	Recognized in OCI		1		–			(87	)		–			(1	)		–			–			–			(87	)
	Other⁽²⁾		14		(4	)		10			–			(17	)		–			(2	)		–			1
	Balance at end of year	$	298	$	12		$	437		$	16		$	66		$	38		$	125		$	2		$	994
2017	Balance at beginning of year	$	227	$	88		$	520		$	31		$	25		$	70		$	115		$	2		$	1,078
	Recognized in net income		2		(14	)		19			15			(26	)		(49	)		3			–			(50	)
	Recognized in OCI		–		–			(49	)		–			19			–			–			–			(30	)
	Acquisitions		14		–			86			–			111			–			7			3			221
	Other⁽²⁾		2		(5	)		(17	)		1			(5	)		(3	)		(20	)		(3	)		(50	)
	Balance at end of year	$	245	$	69		$	559		$	47		$	124		$	18		$	105		$	2		$	1,169
2016	Balance at beginning of year	$	208	$	81		$	353		$	25		$	2		$	62		$	101		$	1		$	833
	Recognized in net income		18		2			13			7			7			–			16			1			64
	Recognized in OCI		–		–			155			–			16			–			–			–			171
	Other⁽²⁾		1		5			(1	)		(1	)		–			8			(2	)		–			10
	Balance at end of year	$	227	$	88		$	520		$	31		$	25		$	70		$	115		$	2		$	1,078



Deferred tax liabilities
$ millions, for the year ended October 31		Intangible assets			Buildings and equipment			Pension and employee benefits			Goodwill			Financial instrument revaluation			Foreign currency			Other			Total liabilities
2018	Balance at beginning of year under IFRS 9 ⁽³⁾	$	(329	)	$	(52	)	$	(10	)	$	(93	)	$	(17	)	$	(1	)	$	30		$	(472	)
	Recognized in net income		53			–			3			1			3			–			(13	)		47
	Recognized in OCI		–			–			(3	)		–			(2	)		–			13			8
	Other⁽²⁾		(11	)		5			(1	)		7			4			1			(24	)		(19	)
	Balance at end of year	$	(287	)	$	(47	)	$	(11	)	$	(85	)	$	(12	)	$	–		$	6		$	(436	)
2017	Balance at beginning of year	$	(158	)	$	(45	)	$	(8	)	$	(88	)	$	(54	)	$	24		$	1		$	(328	)
	Recognized in net income		(19	)		(3	)		1			(5	)		36			–			19			29
	Recognized in OCI		–			–			(5	)		–			(13	)		–			2			(16	)
	Acquisitions		(143	)		(7	)		–			–			–			–			–			(150	)
	Other⁽²⁾		(9	)		3			2			–			14			(25	)		8			(7	)
	Balance at end of year	$	(329	)	$	(52	)	$	(10	)	$	(93	)	$	(17	)	$	(1	)	$	30		$	(472	)
2016	Balance at beginning of year	$	(124	)	$	(49	)	$	(13	)	$	(81	)	$	(29	)	$	(38	)	$	(20	)	$	(354	)
	Recognized in net income		(33	)		5			8			(6	)		(29	)		–			11			(44	)
	Recognized in OCI		–			–			(5	)		–			(8	)		62			4			53
	Other⁽²⁾		(1	)		(1	)		2			(1	)		12			–			6			17
	Balance at end of year	$	(158	)	$	(45	)	$	(8	)	$	(88	)	$	(54	)	$	24		$	1		$	(328	)

Net deferred tax assets as at October 31, 2018																							$	558
Net deferred tax assets as at October 31, 2017																							$	697
Net deferred tax assets as at October 31, 2016																							$	750

(1)	The tax loss carryforwards include $38 million (2017: $18 million; 2016: $70 million) that relate to operating losses (of which $2 million relate to Canada and $36 million relate to the Caribbean) that expire in various years commencing in 2019.

(2)	Includes foreign currency translation adjustments.

(3)	Transition impact from the adoption of IFRS 9 at November 1, 2017 was nil.