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 €1,283k (2006/2007: –€1,907k) have been recorded in equity without any effect on profit and loss. They result from the market valuation of the cash flow hedges.

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. In Germany, tax losses carried forward may be utilized for an indefinite period of time. In reviewing the amount of a deferred tax asset recognized in the balance sheet, it is crucial to assess whether it is probable that temporary differences will reverse and tax losses carried forward will be utilized, being the basis for the recognition of deferred tax assets. This is dependent on future taxable profits arising in those periods when taxable temporary differences reverse and tax losses carried forward may be utilized. Based on past experience and the projected development of taxable profit, Wincor Nixdorf assumes that the corresponding benefits associated with deferred tax assets will be realized. In the case of one foreign entity, no deferred tax assets had been recognized in connection with existing tax losses carried forward, a part of which were acquired. In accordance with IAS 12.37, these unrecognized deferred tax assets were reassessed as of September 30, 2008. Having assessed the tax-specific circumstances and having considered the improvement in business environment, Wincor Nixdorf now expects that there will be sufficient taxable profit in the future for the deferred tax asset to meet the necessary recognition criteria.

The previously unrecognized deferred tax asset was recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. As of September 30, 2008, tax losses carried forward in the amount of €10,361k (2006/2007: €7,692k) 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 €34k above those which would be expected to be arrived at through the application of the ultimate parent company’s tax rate. Last year, actual tax proceeds were €10,962k below those which could have been expected.

As of September 30, 2008, unchanged to the previous year, all German deferred taxes were calculated in respect of temporary differences using a combined tax rate of rounded 30%. The reported value of all deferred taxes on tax losses carried forward was arrived at by using tax rates as in the previous year of 14% for municipal corporate income tax and 16% for corporation tax and solidarity tax. In fiscal 2006/2007, a deferred tax income of €3,217k arose from the reduction of the 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:

The effective tax rate is 30.0% (2006/2007: 32.2%).

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