33. Income Taxes

Tax expenditure comprises corporation and trade tax on 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 expenditure of the Group.

Deferred taxes are determined using the liability method in accordance with IAS 12. According to 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 IFRS 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 the asset is realized or at the time the liability is settled 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 13.1 percent and 16.1 percent due to 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 19.0 percent and 27.0 percent (previous year: between 19.0 percent and 27.0 percent).

Key components of income tax expenditure break down as follows:

Deferred taxes result from temporary differences between the tax bases of the companies and the carrying amounts in the combined statement of financial position according to the liability method, as well as from the valuation allowances for deferred taxes capitalized in prior periods on temporary differences and loss carryforwards, from the use of loss carryforwards for which deferred taxes had been capitalized, from the elimination of loss carryforwards, and from the recognition of deferred taxes on interest carried forward.

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 7,896 thousand (previous year: EUR 11,779 thousand) of the deferred taxes was classified as current and EUR 1,180 thousand (previous year: EUR 1,129 thousand) as non-current. Of the changes in equity, EUR 515 thousand (previous year: EUR 47 thousand) was offset against other reserves and EUR 119 thousand (previous year: EUR 12 thousand) recognized in retained earnings.

Deferred tax assets

The recognition and measurement of other liabilities in the amount of EUR 44,146 thousand (previous year: EUR 56,514 thousand) relates principally to the following line items:

• Loans to affiliated companies

• Loans to equity investments

• Trade receivables

• Other assets

• Trade payables

• Other current financial liabilities

The recognition and measurement of other liabilities in the amount of EUR 2,777 thousand (previous year: EUR 6,253 thousand) relates principally to the following line items:

• Other non-current liabilities

• Government grants (current and non-current)

Deferred tax liabilities

The recognition and measurement of other liabilities in the amount of EUR -6,085 thousand (previous year: EUR -27,074 thousand) relates principally to the following line items:

• Current financial receivables

• Trade receivables

• Cash and cash equivalents

The recognition and measurement of other liabilities in the amount of EUR -12,541 thousand (previous year: EUR -6,996 thousand) relates principally to the following line items:

• Non-current loans

• Current portion of non-current loans

• Other current liabilities

The following deferred tax assets were not capitalized:

The assessment of the recoverability of deferred tax assets is based on the estimation of the probability of the reversal of the measurement differences and the availability for use of the loss and interest expense carryforwards which resulted in deferred tax assets. This is dependent upon the generation of future taxable earnings during the periods, in which those tax measurement differences are reversed and tax loss and interest expense carryforwards are available for use. The basis of the measurement is the five-year medium-term planning of the individual Group companies.

As of the reporting date of December 31, 2025, the tax trust model had unused trade tax loss carryforwards of EUR 148,348 thousand for offsetting against future profits. Temporary differences of EUR 47,903 thousand also arose from revaluation reserves on provisions for pensions, provisions for the social future concept and heritable building rights, which we assume can also be utilized due to the aforementioned effects.

In light of this, we recognized deferred taxes of EUR 7,552 thousand (previous year: EUR 7,883 thousand) on temporary differences (EUR 47,903 thousand) at a tax rate of 15.77 percent as of the reporting date of December 31, 2025.

As of December 31, 2025, the Group had tax loss carryforwards of EUR 338,437 thousand (previous year: EUR 314,414 thousand). No deferred tax assets were capitalized for tax loss carryforwards of EUR 337,514 thousand (previous year: EUR 301,619 thousand) of various subsidiaries as of December 31, 2025. 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, 2025, and December 31, 2024, relate to subsidiaries whose expected taxable income situation is considered unlikely to permit the use of deferred tax assets.

Interest expense carryforwards of the Group came to EUR 35,520 thousand as of December 31, 2025 (previous year: EUR 31,725 thousand). No deferred tax assets were recognized for EUR 35,520 thousand (previous year: EUR 31,725 thousand) of this amount, as the respective Group companies are not expected to generate the EBITDA required for this purpose in the next five years.

Reconciliation of the effective tax rate and the effective income tax expenditure is presented in the table.

Minimum taxation

With the Council Directive (EU) 2022/2523 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union (Minimum Tax Act – MinStG) of December 21, 2023, the BLG LOGISTICS GROUP AG & Co. KG is obliged for the first time to apply the provisions of the Global Minimum Tax (Pillar 2) for the 2025 financial year. This obligation arises for the BLG LOGISTICS GROUP AG & Co. KG as the group owner of an internationally active group of companies, since the Group has recorded annual revenues of minimum EUR 750 million in at least two out of four financial years preceding the 2025 financial year (Section 1 (1) MinStG).

The international business activities of the BLG Group are limited to a total of four tax jurisdictions relevant to the MinStG (Germany, South Africa, Poland and the USA). The other tax jurisdictions in which the BLG Group operates are not taken into account due to the provisions of the MinStG on joint ventures or investments accounted for using the equity method. In light of the transitional arrangements for groups with marginal international activity contained in the MinStG, the BLG Group is expected to be exempt from provisions that do not concern the primary supplementary tax rate in accordance with Sections 8 to 10 MinStG (Section 83 (1) in conjunction with (2) nos. 1 and 2 MinStG) up to and including the 2028 financial year. The conditions of the transitional arrangement are met for the 2025 financial year because the BLG Group had presence in fewer than six tax jurisdictions and the total value of the tangible assets of all business units in foreign tax jurisdictions was less than EUR 50 million (December 31, 2025: EUR 15.35 million, previous year: EUR 19.97 million).

As a result of the loss situation among the group companies in the USA and an effective tax rate in excess of 15% (21.2%; previous year: 24.6%) applicable to the group company in South Africa, no primary supplementary tax rate is to be taken into account for these tax jurisdictions domestically in the 2025 financial year.

For Polish territory, a domestic supplementary tax has been introduced with effect from January 1, 2025, as part of the implementation of the Pillar Two agreement. This tax is to be levied and declared with priority over supplementary taxes in the group parent’s member state. Due to an effective income tax rate of 0% in 2025, a provision of EUR 175 thousand has been recognized at the Polish subsidiary. Accordingly, no provision is to be recognized at the level of the group parent for 2025.