(6) Income Taxes


 

 

€k

 

2006/2007

2005/2006

Ongoing taxes on income and profit

–63,732

–31,032

Deferred tax income and expenses

11,818

–15,120

 

–51,914

–46,152

The amounts shown above for ongoing taxes on income and profit relate, within Germany, to corporate income tax and municipal corporate income tax, plus proceeds from partial release of tax accruals made during the previous year and, in the case of foreign subsidiaries, income-related taxes calculated in accordance with the national tax legislation applicable to the individual companies.

Deferred taxes (Glossary in the amount of €5,616k (2005/2006: €3,456k) have been recorded in equity without any effect on profit and loss. They result from the market valuation of the cash flow (Glossary hedges and in the previous year from market valuation of the “available-for-sale” securities. The tax effect on the settlement of the share-based payment program 2005 in fiscal 2006/2007, of €3,880k has also been recognized directly in equity (2005/2006: €3,643k on the settlement of the share-based payment program 2004).

The deferred taxes are the result of time-related variances in reported values between the tax accounts of individual companies and the values of the Group financial statements, using the liability method, plus capitalization of tax losses capable of being carried forward. As of September 30, 2007, tax losses carried forward in the amount of €7,692k (2005/2006: €1,195k) have not been capitalized.

Any dividends payable in the future of Wincor Nixdorf AG will have no effect upon the Group’s tax charges.

Actual tax expenses are €10,962k below those which would be expected to be arrived at through the application of the ultimate parent company’s tax rate for distributions. Last year, actual tax proceeds were €3,770k below those which could have been expected.

Germany’s business taxation reform, which was passed by the German Bundestag on May 24, 2007 and the German Bundesrat on July 6, 2007, will result in a decrease of business tax rates. Thus, as of September 30, 2007, all German deferred taxes were calculated in respect of temporary differences using a combined tax rate of rounded 30% (2005/2006: 39%). The reported value of all deferred taxes (Glossary on tax losses carried forward was arrived at by using tax rates of 14.0% (2005/2006: 17.0%) for municipal corporate income tax and 16.0% (2005/2006: 26.375%) for corporation tax and solidarity tax. A deferred tax income of €3,217k arose from the reduction of deferred tax rate on temporary differences and tax losses carried forward in Germany.

The table below contains a reconciliation of expected net tax expenses with the actual reported tax:

 

 

€k

 

2006/2007

2005/2006

Group profit before tax

161,220

128,005

 

 

 

Expected tax expenses based on a rate of 39% (2005/2006: 39%)

–62,876

–49,922

Differences from expected tax expenses

 

 

Difference from local tax rates

10,189

8,931

Difference arising from change of deferred tax rate and income tax rate

3,630

–642

Increases/decreases in tax due to tax-exempt income and non-tax-deductible expenses

–1,108

–1,693

Consolidation entries excl. deferred taxes or with differing tax rates

–132

580

Corrections arising from tax audits and other effects

–746

–2,818

Valuation allowances on deferred tax assets capitalized for tax losses carried forward

–871

–588

Total adjustments

10,962

3,770

Actual tax expenses

–51,914

–46,152

The effective tax rate is 32.2% (2005/2006: 36.1%).

The deferred tax assets and liabilities relate to the following balance sheet items:

 

 

 

 

€k

 

Sept. 30, 2007

Sept. 30, 2006

 

Deferred
tax assets

Deferred
tax liabilities

Deferred
tax assets

Deferred
tax liabilities

Intangible assets

442

39,366

966

49,870

Tangible assets

1,238

1,529

1,277

1,907

Financial assets

0

424

4

0

Inventories

13,516

12,538

12,771

11,271

Receivables and other current assets

9,877

1,343

9,042

129

Pension accruals

11,637

531

20,084

547

Other accruals

21,201

314

11,427

145

Liabilities

10,997

6,593

5,732

6,336

Losses carried forward

5,314

0

6,846

0

 

74,222

62,638

68,149

70,205

Netting off of deferred tax assets and liabilities

–60,631

–60,631

–57,363

–57,363

 

13,591

2,007

10,786

12,842

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