Reporting 2021

Income taxes

33. Income taxes

The tax expense consists of corporation and trade tax of domestic companies and comparable income taxes for foreign companies.

The taxation applies regardless of whether the income is reinvested or distributed. The implementation of the proposed distribution of net retained profits has no effect on the tax expense of the Group.

In accordance with IAS 12, deferred taxes are determined using the liability method. Under this method, deferred taxes are recognized for all accounting and measurement differences between the IFRS carrying amounts and the tax base if they balance each other out over time (temporary differences). If asset items under IFRSs have a higher value than in the tax base and these are temporary differences, a liability item is recognized for deferred taxes.

Deferred tax assets from accounting differences and benefits from the future utilization of tax loss carryforwards are capitalized if it is probable that future taxable earnings will be generated.

The tax rates valid at the time of realization of the asset or the settlement of the liability are used to calculate deferred tax assets and liabilities. These are measured using the tax rates of the individual Group companies. For domestic partnerships these comprise only trade tax and vary between 13.3 percent and 16.1 percent because of different assessment rates.

For domestic corporations a tax rate of 31.9 percent (previous year: 31.9 percent) was applied, comprising the corporation tax rate plus the solidarity surcharge and the trade tax rate for the main consolidated companies. The income tax rates for foreign Group companies ranged between 15.0 percent and 28.0 percent (previous year: between 15.0 percent and 28.0 percent).

Key components of income tax expense break down as follows:

EUR thousand 2021 2020
Current taxes    
Tax expense for the period 4,112 4,358
Tax expense for prior periods 162 98
Income from tax reimbursements
-1,542 -3
Total current taxes 2,732 4,453
of which    
Tax expense domestic 4,126 4,364
Tax income domestic -1,542 -3
Tax expense foreign 148 92
  2,732 4,453
Deferred taxes    
Deferred taxes on temporary differences
-1,116 -491
Deferred taxes on loss carryforwards
44 85
Total deferred taxes -1,072 -406
of which    
Deferred taxes domestic -1,106 -508
Deferred taxes foreign 34 102
  -1,072 -406
Total 1,660 4,047

Deferred taxes result from temporary differences between the tax bases of the companies and the carrying amounts in the consolidated statement of financial position using the liability method, as well as from the loss allowances for deferred taxes on temporary differences and loss carryforwards capitalized in previous years, from the reversal of loss allowances for temporary differences and loss carryforwards, from the use of loss carryforwards on which deferred taxes have been capitalized, from the elimination of loss carryforwards and from the initial recognition of deferred taxes on loss carryforwards.

Deferred income taxes

The deferred tax items reported as of the ends of the various reporting periods and the movements of deferred taxes within the reporting year relate to the items presented in the table:

EUR 8,244,000 (previous year: EUR 11,251,000) of the deferred taxes was classified as current and EUR -6,106,000 (previous year: EUR -9,060,000) as non-current. Of the changes in equity, EUR -734,000 (previous year: EUR -5,000) was offset against other reserves and EUR -392,000 (previous year: EUR -107,000) recognized in retained earnings.

  12/31/2020   12/31/2021
EUR thousand   Recognized in P&L Recognized in equity  
Deferred tax assets        
Recognition and measurement of goodwill and other intangible assets 859 -790 35 104
Measurement of property, plant and equipment 3,964 -376 0 3,588
Recognition and measurement of other assets 64,527 -12,125 88 52,490
Recognition of lease liabilities 73,783 365 0 74,148
Measurement of personnel-related provisions 4,887 -122 -517 4,248
Recognition and measurement of miscellaneous other provisions 2,008 143 0 2,151
Recognition of derivative financial instruments 2,155 32 -759 1,428
Recognition and measurement of other liabilities 2,403 -194 106 2,315
Write-down of deferred taxes arising from temporary differences -16,049 1,060 -581 -15,570
Consideration of tax loss carryforwards 131 -44 0 87
Gross deferred taxes 138,668 -12,051 -1,628 124,989
Offset -135,900     -122,633
Recognized deferred taxes 2,768     2,356
  12/31/2020 Changes 12/31/2021
EUR thousand   Recognized in P&L Recognized in equity  
Deferred tax liabilities        
Recognition and measurement of intangible assets -492 76 16 -400
Measurement of property, plant and equipment -54,183 5,232 5 -48,946
Capitalization of leases -31,663 -2,899 0 -34,562
Recognition and measurement of other assets -7,057 1,056 29 -5,972
Measurement of personnel-related provisions -3,037 -1,315 452 -3,900
Recognition and measurement of miscellaneous other provisions -118 -34 0 -152
Recognition and measurement of other liabilities -39,927 11,008 0 -28,919
Gross deferred taxes -136,477 13,124 502 -122,851
Offset 135,900     122,633
Recognized deferred taxes -577     -218

The following deferred tax assets were not capitalized:

EUR thousand 2021 2020
Deductible temporary differences
15,570 16,049
Loss carryforwards 48,310 44,759
Total 63,880 60,808

The assessment of the recoverability of deferred tax assets depends on the estimation of the probability of the reversal of the measurement differences and the utilization of the loss carryforwards which resulted in deferred tax assets. This is dependent upon the generation of future taxable profits during the periods in which those tax measurement differences are reversed and tax loss carryforwards can be utilized. The basis of the measurement is the three-year medium-term planning of the individual Group companies.

For subsidiaries that have suffered losses during the reporting year or the previous year, deferred tax assets of EUR 0,000 (previous year: EUR 1,339,000) were reported due to the improved earnings outlook.

As of December 31, 2021, the Group had tax loss carryforwards of EUR 296,140,000 (previous year: EUR 275,400,000). As of December 31, 2021, no deferred tax assets were capitalized for tax loss carryforwards of EUR 295,706,000 (previous year: EUR 274,853,000) of various subsidiaries. No deferred tax assets were recognized for these losses since these losses may not be used to offset taxable earnings of other Group companies and arose in subsidiaries that have generated tax losses for some time or will not generate sufficient taxable profits in the foreseeable future.

The deductible differences for which no deferred taxes were capitalized as of December 31, 2021 and December 31, 2020 related to subsidiaries whose expected taxable income situation is not expected to allow the use of deferred tax assets.

Reconciliation of the effective tax rate and the effective income tax expense:

EUR thousand   2021   2020
Net profit for the year before income taxes under IFRSs 52,226 -116,127
Group tax rate in percent 16.10%   16.10%  
Expected income tax expense in the financial year   8,408   -18,696
Reconciliation items        
Effects of changes in tax rates   42   593
Tax-free income/trade tax cuts   -12,889   -1,380
Non-deductible operating expenses/trade tax additions/effects of the interest barrier   4,674   10,980
Use of other tax operating expenses   153   -724
Current tax expense/income from prior periods   -1,377   94
Deferred tax expense/income from prior periods   -953   403
Effects of differing tax rates   961   352
Use of loss carryforwards not previously recognized   -293   -82
Non-recognition of deferred tax assets on current losses   4,859   4,811
Recognition adjustments for deferred tax assets on temporary differences   -1,060   2,452
Other effects   -865   5,244
Total of the reconciliation items -12.9% -6,748 -19.6% 22,743
Consolidated income tax expense 3.2% 1,660 -3.5% 4,047

34. Income taxes on income and expenses
recognized directly in equity

  2021 2020
EUR thousand Gross value Tax expense/ income Net value Gross value Tax expense/ income Net value
Items that are not subsequently reclassified to profit or loss            
Remeasurement of net pension obligations -370 -734 -1,104 1,195 -4 1,191
Proportionate share of equity-accounted investments in items that are not subsequently reclassified to profit or loss
1,043 -169 874 629 -107 522
  673 -903 -230 1,824 -111 1,713
Items that can subsequently be reclassified to profit or loss            
Currency translation -47 0 -47 -1,273 0 -1,273
Change in the measurement of financial instruments 4,718 -25 4,693 -4,157 -20 -4,177
Proportionate share of equity-accounted investments in items that can subsequently be reclassified to profit or loss
1,668 0 1,668 -2,897 0 -2,897
  6,339 -25 6,314 -8,327 -20 -8,347
Total 7,012 -928 6,084 -6,503 -131 -6,634

35. Reimbursement rights from income taxes

The tax assets related to reimbursement rights for the reporting year of EUR 1,169,000 (previous year: EUR 292,000) as well as reimbursement rights for previous years of EUR 1,675,000 (previous year: EUR 930,000).

Please refer to note 33 for information on rights arising from deferred taxes.

36. Payment obligations from income taxes

EUR thousand 12/31/2021 12/31/2020
Corporation and trade tax for the reporting year
370 2,646
Corporation and trade tax for previous years
1,272 3,414
Total 1,642 6,060

Please refer to note 33 for information on rights arising from deferred taxes.