04 Income Taxes

This item comprises income taxes paid or owed in the individual countries as well as deferred taxes. In Germany, in addition to a corporate tax of 15.0 percent (versus 15.0 percent a year earlier), a solidarity surcharge of 5.5 percent applies (versus 5.5 percent). Trade income tax of 12.2 percent (versus 12.2 percent) must also be paid. It varies depending on the municipality in which a company is located.

Deferred taxes of German companies are therefore measured based on a total tax rate (including solidarity surcharge) of 28.0 percent (versus 28.0 percent in the prior year). The current taxes of foreign subsidiaries are determined according to domestic tax laws and rates valid in the country in which the respective company is based. The respective current income tax rates applied in each country for our foreign companies ranged from 9.0 percent to 34.6 percent (versus 9.0 percent to 39.0 percent).

Deferred taxes on undistributed profits of subsidiaries were recognized only if distribution is planned. The amount of €359.5 million is available for distribution, compared with €297.7 million in the prior year.

Income taxes include current tax expenses of €0.8 million from prior years (after €18.2 million a year earlier) and deferred tax income of €0.0 million (after €2.8 million).

One of the consequences of the interpretation of IFRS No. 4 adopted by ASCG on September 5, 2018, is that expected interest on uncertain tax positions is no longer reported under income tax expense, but rather under other financial result. The corresponding prior-year figures were adjusted accordingly. In 2017, current tax expenses were lower at €7.6 million and reclassified to other financial result.

Due to the utilization of previously unrecognized temporary differences and previously unrecognized tax losses from earlier periods, the actual income tax expense was reduced by €15.8 million in the prior year. Deferred tax income in the year under review contained an amount of €7.6 million in previously unrecognized temporary differences and previously unrecognized tax losses from earlier periods.

The changes in deferred tax assets and liabilities of €28.1 million were recognized as income in the income statement (versus €41.2 million a year earlier), while €40.6 million (versus €-33.4 million) was recognized directly in equity. This mainly consists of deferred tax assets from variations in actuarial gains and losses in relation to pension provisions. Changes in the scope of consolidation resulted in prior-year deferred tax assets of €6.0 million that were disposed of and not recognized in the income statement, while prior-year disposals of deferred tax liabilities totaled €2.5 million.

The existing tax loss carryforwards can be utilized as follows:

The total loss carryforwards generated amounted to €62.1 million (versus €106.0 million in the previous year). Of this amount, €14.2 million (versus €79.4 million) is expected to be non-realizable, which is why no deferred tax assets were recognized. If they had been recognized, however, they would have amounted to €3.5 million (versus €19.9 million). Of the loss carryforwards that are not realizable for tax purposes, the amount of €6.7 million (€48.9 million) is unlimited as to time and amount. As of December 31, 2018, no deferred tax assets were recognized for tax-deductible temporary differences of €191.7 million (€204.6 million).