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, a 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 legal 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 limited company’s profits on which corporation tax is payable.

Income tax

In € thousand

 

2021

 

2020

Deferred taxes on temporary differences

 

3,128

 

- 9,357

of which domestic

 

957

 

- 10,955

of which foreign

 

2,171

 

1,598

Deferred taxes on losses carried forward

 

- 1,969

 

452

of which domestic

 

- 860

 

0

of which foreign

 

- 1,109

 

452

Total deferred taxes

 

1,159

 

- 8,905

Current income tax expense

 

57,560

 

33,878

of which domestic

 

38,431

 

19,511

of which foreign

 

19,129

 

14,367

 

 

58,719

 

24,973

Current income tax expenses include tax expenses from other accounting periods amounting to € - 35 thousand (previous year: € 1,189 thousand).

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

Deferred taxes recognised in the balance sheet

 

 

Deferred tax assets

 

Deferred tax liabilities

in € thousand

 

31.12.2021

 

31.12.2020

 

31.12.2021

 

31.12.2020

Intangible assets

 

0

 

0

 

5,564

 

5,194

Property, plant and equipment

 

0

 

0

 

31,362

 

28,728

Investment property

 

0

 

0

 

8,945

 

9,346

Other assets

 

1,840

 

1,833

 

4,386

 

3,626

Pension and other provisions

 

114,614

 

129,874

 

1,346

 

1,204

Other liabilities

 

36,307

 

35,730

 

417

 

394

Tax losses carried forward

 

2,375

 

406

 

0

 

0

 

 

155,136

 

167,843

 

52,020

 

48,492

Netted amounts

 

- 27,254

 

- 26,423

 

- 27,254

 

- 26,423

 

 

127,882

 

141,420

 

24,766

 

22,069

Reconciliation between the income tax and hypothetical tax based on the IFRS result and the Group’s applicable tax rate

in € thousand

 

2021

 

2020

Earnings before tax (EBT)

 

191,617

 

99,105

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

 

61,854

 

31,991

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

 

- 244

 

1,233

Tax-free income

 

942

 

2,331

Non-deductible expenses

 

2,752

 

1,983

Trade tax additions and reductions

 

- 57

 

- 624

Permanent differences

 

3,695

 

- 1,498

Differences in tax rates

 

- 14,806

 

- 12,811

Impairment losses in deferred tax assets

 

4,503

 

2,393

Other tax effects

 

80

 

- 25

Income tax

 

58,719

 

24,973

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 the reporting year and the previous year. This is made up of corporation tax at 15.0 %, a 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 %.

Permanent differences only include items for which no deferred taxes are recognised due to their permanent nature. The change compared to the previous year is essentially due to the discounting of an entitlement to financial settlement resulting from a profit and loss transfer agreement.

The effects of tax rates for domestic and foreign taxes that diverge from the Group parent company’s tax rate are reported in 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 corporation and trade tax loss carry-forwards of € 2,381 thousand (previous year: € 0 thousand) for which deferred tax assets of € 860 thousand (previous year: € 0 thousand) are recognised. Deferred taxes of € 1,515 thousand (previous year: € 406 thousand) are recognised on foreign tax loss carry-forwards of € 6,008 thousand (previous year: € 2,138 thousand). No deferred tax assets are recognised for domestic corporation tax loss carry-forwards of € 14,612 thousand (previous year: € 7,955 thousand), domestic trade tax loss carry-forwards of € 36,318 thousand (previous year: € 23,956 thousand) and foreign tax loss carry-forwards of € 32,119 thousand (previous year: € 20,950 thousand). Under current legislation, tax losses can be carried forward in Germany without restriction.

Deferred tax assets of € 28,045 thousand (previous year: € 43,459 thousand) recognised directly in equity without effect on profit and loss come from actuarial gains and losses on pension provisions and unrealised gains/losses arising from financial assets measured at fair value.

Deferred taxes recognised in the statement of comprehensive income

 

 

Gross

 

Taxes

 

Net

in € thousand

 

2021

 

2020

 

2021

 

2020

 

2021

 

2020

Actuarial gains/losses

 

47,742

 

- 22,376

 

- 15,405

 

7,220

 

32,337

 

- 15,156

Cash flow hedges

 

8

 

0

 

0

 

0

 

8

 

0

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

 

27

 

- 164

 

- 9

 

0

 

18

 

- 164

 

 

47,777

 

- 22,540

 

- 15,414

 

7,220

 

32,363

 

- 15,320