18. Income Tax

Paid or outstanding income taxes and deferred taxes are shown under the item income taxes. Income taxes are made up of corporation tax, solidarity surcharge and trade tax. Companies domiciled in Germany pay corporation tax of 15.0 % and a solidarity surcharge of 5.5 % of the corporation tax expense. These companies and German-based subsidiaries in the form of limited partnerships are also liable for trade tax, which is imposed at different local rates. Trade tax does not reduce the amount of a company’s profits on which corporation tax is payable.

Components of Income Tax Expenses

Deferred taxes and current income tax in € thousand

 

2015

 

2014

Deferred taxes on temporary differences

 

- 1,948

 

- 3,830

Of which Domestic

 

- 1,510

 

- 3,181

Of which Foreign

 

- 438

 

- 649

Deferred taxes on losses carried forward

 

- 71

 

- 291

Of which Domestic

 

0

 

- 297

Of which Foreign

 

- 71

 

6

Total deferred taxes

 

- 2,019

 

- 4,121

Current income tax expense

 

34,021

 

43,659

Of which Domestic

 

21,138

 

36,700

Of which Foreign

 

12,883

 

6,959

Income tax expense recognised in the income statement

 

32,002

 

39,538

Current income tax expenses include tax income from other accounting periods amounting to € 67 thousand (previous year: € 544 thousand).

Deferred tax assets and liabilities result from temporary differences and tax loss carry-forwards.

Deferred Taxes

 

 

Deferred tax assets

 

Deferred tax liabilities

in € thousand

 

31.12.2015

 

31.12.2014

 

31.12.2015

 

31.12.2014

Intangible assets

 

0

 

0

 

1,662

 

1,539

Property, plant and equipment and finance leases

 

0

 

0

 

9,903

 

13,481

Investment property

 

0

 

0

 

10,761

 

13,785

Financial assets

 

0

 

0

 

1,258

 

258

Inventories

 

317

 

54

 

0

 

0

Receivables and other assets

 

395

 

1,943

 

434

 

1,531

Pension and other provisions

 

67,405

 

78,421

 

2,181

 

3,065

Liabilities

 

6,540

 

4,259

 

6,034

 

2,462

Tax losses carried forward

 

26

 

97

 

0

 

0

 

 

74,683

 

84,774

 

32,233

 

36,121

Netted amounts

 

- 13,287

 

- 21,217

 

- 13,287

 

- 21,217

 

 

61,396

 

63,558

 

18,946

 

14,904

Reconciliation between the Income Tax Expenses and Hypothetical Tax Expenses based on the IFRS Result and the Group’s Applicable Tax Rate

in € thousand

 

2015

 

2014

Profit after tax

 

127,845

 

130,094

Income tax expense at hypothetical income tax rate of 32.28 % (previous year: 32.28 %)

 

41,268

 

41,994

Tax income (-), tax expenses (+) for prior years

 

- 288

 

- 1,311

Tax-free income

 

- 1,011

 

- 1,677

Non-deductible expenses

 

919

 

2,495

Trade tax additions and reductions

 

1,245

 

1,428

Permanent differences

 

- 247

 

929

Differences in tax rates

 

- 9,302

 

- 3,996

Impairment losses in deferred tax assets

 

952

 

745

Other tax effects

 

- 1,534

 

- 1,069

Actual income tax expenses

 

32,002

 

39,538

Deferred taxes are calculated on the basis of the tax rates currently in force in Germany or those expected to apply at the time of realisation. A tax rate of 32.28 % was used for the calculations in both 2015 and 2014. This is made up of corporation tax at 15.0 %, solidarity surcharge of 5.5 % of the corporation tax, and the trade tax payable in Hamburg of 16.45 %. Limited partnerships are also liable for trade tax. Due to special rules, property management companies generally do not pay trade tax. Due to rules on minimum taxation, tax loss carry-forwards are only partially usable in Germany. Tax losses of up to € 1 million can be set off against taxable profits without restriction, and higher tax losses up to a maximum of 60 %.

The effects of tax rates for domestic and foreign taxes that diverge from the Group parent company’s tax rate are reported in the offsetting and reconciliation under differences in tax rates.

Deferred tax assets are recognised on tax loss carry-forwards and temporary differences if it is sufficiently certain that they can be realised in the near future. The Group has no domestic corporation tax loss carry-forwards, no domestic trade tax loss carry-forwards, and foreign tax loss carry-forwards of € 135 thousand (previous year: € 512 thousand), for which deferred taxes in the amount of € 26 thousand (previous year: € 97 thousand) have been capitalised. No deferred tax assets are recognised for domestic corporation tax loss carry-forwards of € 5,392 thousand (previous year: € 4,447 thousand), domestic trade tax loss carry-forwards of € 3,632 thousand (previous year: € 3,399 thousand) and foreign tax loss carry-forwards of € 13,811 thousand (previous year: € 9,802 thousand). Under current legislation, the tax losses can be carried forward in Germany without restriction.

Deferred tax assets of € 12,405 thousand (previous year: € 20,355 thousand) recognised directly in equity without effect on profit and loss come from actuarial gains and losses on pension provisions, cash flow hedges and unrealised gains/losses arising from available-for-sale financial assets.

Deferred Taxes recognised in the Statement of Comprehensive Income

 

 

Gross

 

Taxes

 

Net

in € thousand

 

2015

 

2014

 

2015

 

2014

 

2015

 

2014

Actuarial gains/losses

 

25,149

 

- 79,130

 

- 7,833

 

25,129

 

17,316

 

- 54,001

Cash flow hedges

 

381

 

299

 

- 130

 

98

 

251

 

397

Unrealised gains/losses on available-for-sale financial assets

 

- 11

 

121

 

12

 

- 12

 

1

 

109

 

 

25,519

 

- 78,710

 

- 7,951

 

25,215

 

17,568

 

- 53,495