Notes to the Consolidated Financial Statements (34) Other income and expenses (net) Other income and expenses (net) comprise: in CHF million 2018 2017 Gains/(losses) on disposal of foreign operations and investments (3.8) – Interest and dividend income 5.6 4.1 Gains/(losses) arising from valuation changes on financial assets and fair value hedging instruments (0.3) (0.2) Gains/(losses) on foreign currency hedging instruments (8.4) (1.6) Gains/(losses) on foreign currencies (17.3) (5.6) Net interest income/(expense) on defined benefit plans (5.5) (6.0) Total other income and expenses (net) (29.7) (9.3) (35) Finance costs Finance costs are reported at the gross interest expense amount. Interest expense on financial liabilities measured at amortized cost represents the total interest expense on financial liabilities not at fair value through profit or loss. Interest income from investments is separately included in ‘other income and expenses (net)’. (36) Income tax expense in CHF million 2018 2017* Current tax (73.8) (89.7) Deferred tax (47.4) (33.4) Total income tax expense (121.2) (123.1) * Restated, see note 2.2 The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated companies as follows: in CHF million 2018 2017* Net income before income tax 667.6 643.7 Tax calculated at domestic tax rates applicable to profits in the respective countries (114.2) (106.6) Income not subject to tax 3.9 4.1 Expenses not deductible for tax purposes (8.4) (9.5) Utilization of previously unrecognized tax losses 1.5 11.3 Tax losses for which no deferred tax asset has been recognized (0.5) (0.2) Tax attributable to prior years 2.3 8.7 Other effects (5.8) (30.9) Income tax expense (121.2) (123.1) Weighted average applicable tax rate 17.1% 16.6% * Restated, see note 2.2 The line ‘Other effects’ includes the effects of changes in tax rates and expenses or incomes subject to different tax rates. In 2017, the effect of the change in tax rates in the Group’s US companies resulted in a reduction of deferred tax assets of CHF 25.3 million. 2018 Financial Report | 67