[6] Income Taxes.

 

 

€k

 

2015/2016

2014/2015

Current taxes on income and profit

–42,606

–25,991

Deferred tax income and expenses

5,520

18,850

 

–37,086

–7,141

The amounts for current 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.

Included in current taxes on income and profit are non-periodic tax expenses of €3,818k.

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 balance sheet, using the liability method, plus capitalization of tax losses capable of being carried forward. 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. A deferred tax asset will be recognized to the extent that it is probable that future taxable profit will allow the deferred tax asset to be recovered. As of September 30, 2016, tax losses carried forward exist in the amount of €19,592k (2014/2015: €28,967k) and temporary differences in the amount of €1,123k (2014/2015: €12,732k) on which no deferred tax asset has been capitalized. Tax losses amounting to €2,576k for which no deferred tax assets were recognized account for the period until 2023.

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

Actual tax expenses are €4,606k below (2014/2015: €2,667k above) those which would be expected to be arrived at through the application of the ultimate parent company’s tax rate.

As of September 30, 2016, 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.

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

 

 

€k

 

2015/2016

2014/2015

Profit before income taxes

138,973

14,913

 

 

 

Expected tax expenses based on a tax rate of 30%

–41,692

–4,474

Differences from expected tax expenses

 

 

Difference to local tax rates

10,014

4,240

Decreases/increases in tax due to tax-exempt income and non-tax-deductible expenses

3,199

710

Corrections relating to other periods and other effects

–2,837

–494

Changes of allowances/non-recognition of deferred taxes on current losses and temporary differences

–5,752

–7,547

Usage of deferred tax assets not recognized in previous years

442

0

Others

–460

424

Total adjustments

4,606

–2,667

Actual tax expenses

–37,086

–7,141

The effective tax rate is 26.7% (2014/2015: 47.9%).

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

 

 

 

 

€k

 

Sept. 30, 2016

Sept. 30, 2015

 

Deferred tax assets

Deferred tax liabilities

Deferred tax assets

Deferred tax liabilities

Intangible assets

22,164

66,842

60

64,776

Property, plant and equipment

8,150

970

8,483

637

Investments

441

600

411

607

Inventories

11,129

599

14,007

1,345

Receivables and other current assets

2,867

5,675

3,330

5,516

Pension accruals

32,042

1,363

21,588

784

Other accruals

17,581

2,382

27,517

1,005

Liabilities

20,098

487

15,555

1,043

Losses carried forward

1,490

0

6,536

0

Other

859

2,317

2,905

0

 

116,821

81,235

100,392

75,713

Netting off of deferred tax assets and liabilities

–72,109

–72,109

–52,484

–52,484

 

44,712

9,126

47,908

23,229

The changes in deferred tax assets and liabilities shown above are recognized in profit or loss with the following exceptions, which are charged directly to equity:

In the deferred tax assets to pension accruals revaluations of the net defined liability with an equity increasing effect of €21,398k (2014/2015: €12,654k) are included.

Changes in equity to the fair value of financial instruments that meet the requirements of IAS 39 for hedge accounting had an equity-enhancing effect of deferred taxes in the amount of €733k (2014/2015: €3,213k) and are presented in the deferred tax liabilities to receivables and other assets in the amount of €1,510k (2014/2015: €195k) and the deferred tax assets to liabilities of €2,243k (2014/2015: €3,405k).