Income taxes are calculated on the basis of the current legal position in the individual countries regarding applicable or anticipated tax rates as of the realization date. These are generally based on the legal stipulations valid or adopted as of the balance sheet date. In Germany, a solidarity surcharge is added to corporate tax. Trade income tax, which varies depending on the municipality in which a company is located, must also be paid.
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Tax Rates in Germany | ||||
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% |
2012 |
2011 | ||
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Weighted average trade income tax rate |
11.6 |
11.6 | ||
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Corporate tax rate |
15.0 |
15.0 | ||
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Solidarity surcharge on corporate tax |
5.5 |
5.5 | ||
Deferred taxes of German companies are therefore measured based on a total tax rate, including a solidarity surcharge of 27.5 percent (2011: 27.5 percent). The income from foreign Group companies is subject to taxation at the tax rates valid in the country where the respective company is located. The respective local income tax rates applicable in each country for foreign companies range from 10.0 percent to 40.5 percent (2011: from 12.5 percent to 42.0 percent).
No deferred taxes on undistributed profits of subsidiaries were recognized. It was decided not to determine the possible resulting tax effects as the time and expense involved was unreasonably high. The amount of €492.5 million (2011: €523.4 million) is available for distribution.
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€ million |
2012 |
2011 | ||
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Current taxes, domestic |
-84.0 |
-179.8 | ||
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Current taxes, foreign |
-26.8 |
-23.4 | ||
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Current taxes |
-110.8 |
-203.2 | ||
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Deferred taxes, domestic |
21.6 |
-2.8 | ||
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Deferred taxes, foreign |
2.8 |
-5.3 | ||
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Deferred taxes |
24.4 |
-8.1 | ||
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Total income tax |
-86.4 |
-211.3 | ||
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Derivation of the effective tax rate |
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Income before taxes |
193.2 |
567.4 | ||
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Income tax rate for Wacker Chemie AG (%) |
27.5 |
27.5 | ||
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Expected tax expenses |
-53.1 |
-156.0 | ||
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Tax rate divergences |
-1.7 |
6.7 | ||
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Tax effect of non-deductible expenses |
-9.7 |
-13.1 | ||
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Tax effect of tax-free income |
5.2 |
7.8 | ||
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Taxes relating to other periods (current earnings) |
1.8 |
1.9 | ||
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Effects of loss carryforwards and temporary differences |
-5.1 |
-58.1 | ||
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Group equity result |
-22.9 |
-2.7 | ||
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Other divergences |
-0.9 |
2.2 | ||
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Total income tax |
-86.4 |
-211.3 | ||
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Effective tax rate (%) |
44.7 |
37.2 | ||
The tax expenses of €86.4 million reported for fiscal 2012 were €33.3 million higher than the expected tax expenses of €53.1 million that would have resulted from the application of the total tax rate for Germany of 27.5 percent.
Income taxes include current tax expenses for prior years of €2.9 million (2011: €1.6 million). These expenses are offset by deferred tax income from other periods of €4.7 million (2011: €3.5 million).
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Allocation of Deferred Taxes | ||||||||
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€ million |
2012 |
2011 | ||||||
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Deferred tax assets |
Deferred tax liabilities |
Deferred tax assets |
Deferred tax liabilities | ||||
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Intangible assets |
13.5 |
– |
12.8 |
– | ||||
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Property, plant and equipment |
3.7 |
94.4 |
1.3 |
115.3 | ||||
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Financial assets |
0.8 |
– |
0.5 |
– | ||||
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Current assets |
8.4 |
4.1 |
7.7 |
5.4 | ||||
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Provisions for pensions |
29.3 |
0.7 |
26.9 |
1.0 | ||||
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Other provisions |
29.0 |
0.6 |
39.4 |
9.5 | ||||
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Liabilities |
14.0 |
0.1 |
17.4 |
0.5 | ||||
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Loss carryforwards |
1.5 |
– |
3.5 |
– | ||||
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Setting off for companies with profit and loss transfer agreement |
-8.2 |
-8.2 |
-3.5 |
-3.5 | ||||
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Total |
92.0 |
91.7 |
106.0 |
128.2 | ||||
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Setoffs |
-78.7 |
-78.7 |
-94.4 |
-94.4 | ||||
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Statement of financial position item |
13.3 |
13.0 |
11.6 |
33.8 | ||||
Deferred tax assets and liabilities are offset whenever there are future tax amounts imposed on or credited to the same taxpayer by the same tax authority. Furthermore, deferred tax assets are recognized only if it is probable that these tax benefits will be realized.
The change in deferred tax assets and liabilities has been recognized in profit or loss with €24.4 million (2011: €-8.1 million) and charged or credited directly to equity with €-1.8 million (2011: €8.3 million). The existing tax loss carryforwards can be used as follows:
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€ million |
2012 |
2011 | ||
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Within 1 year |
– |
5.8 | ||
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Within 2 years |
13.3 |
12.3 | ||
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Within 3 years |
20.5 |
21.6 | ||
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Within 4 years |
74.5 |
28.3 | ||
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Within 5 years or later |
152.1 |
194.8 | ||
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Total |
260.4 |
262.8 | ||
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Of which loss carryforwards not expected to be realizable |
-255.1 |
-250.4 | ||
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Of which loss carryforwards expected to be realizable |
5.3 |
12.4 | ||
Tax loss carryforwards generated outside Germany amount to a total of €260.4 million (2011: €262.8 million). A total of €5.3 million (2011: €12.4 million) relates to realizable loss carryforwards. Associated deferred tax assets for 2012 amounted to €1.5 million (2011: €3.5 million). Deferred taxes were not recognized on losses that were not realizable. In theory, however, an amount of €70.2 million (2011: €70.5 million) would have resulted from such recognition. Of the loss carryforwards that are not realizable for tax purposes, €8.4 million (2011: €13.9 million) are unlimited as to time and amount. As per December 31, 2012, no deferred tax assets for tax-deductible temporary differences of €299.1 million (2011: €303.5 million) were recognized.