The amounts shown above for ongoing taxes on income and profit relate, within Germany, to capital yield tax, 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. Non-reporting-period taxes are explained separately in the section “Income & Expenses Outside the Reporting Period.”

Deferred taxes in the amount of € 2,683k (previous year: € –111k) have been recorded in revaluation reserves in equity without any effect on profit and loss. They result from the market valuation of the cash flow hedge. For further explanations we refer to "Financial Instruments".

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 consolidated Group accounts using the liability method plus capitalization, mainly within WINCOR NIXDORF International GmbH, Paderborn, of tax losses capable of being carried forward.

Given the past favorable profits in the retail and banking businesses and also the expected positive future profits from WINCOR NIXDORF International GmbH, Paderborn, it is sufficiently certain that the future taxable income of WINCOR NIXDORF International GmbH, Paderborn, and the other Group companies will be enough to realize the deferred taxes reported as balance sheet assets.

As of September 30, 2005 all German deferred taxes were calculated in respect of temporary differences using a combined tax rate of 39 %. The reported value of all deferred taxes on tax losses carried forward was arrived at by using tax rates of 17 % for municipal corporate income tax and 26.375 % for corporation tax whilst allowing for the ability of municipal corporate income tax to be treated as a tax-deductible expense for corporation tax purposes.

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

Actual tax expenses are € 91k 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, mainly due to the effect of extraordinary items, actual tax proceeds were € 4,160k below those which could have been expected.

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

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