10 Income tax income/expense

The statutory corporation tax rate in Germany for the 2013 assessment period was 15%. Including trade tax and the solidarity surcharge, this resulted in an aggregate tax rate of 29.5%.

A tax rate of 29.8% (previous year: 29.5%) was used to measure deferred taxes due to changes in the German consolidated tax group.

The local income tax rates applied for companies outside Germany vary between 0% and 41%. In the case of split tax rates, the tax rate applicable to undistributed profits is applied.

The realization of tax benefits from tax loss carryforwards from previous years resulted in a reduction in current income taxes in 2013 of €356 million (previous year: €319 million).

Previously unused tax loss carryforwards amounted to €11,164 million (previous year: €11,762 million). Tax loss carryforwards amounting to €9,070 million (previous year: €9,810 million) can be used indefinitely, while €442 million (previous year: €611 million) must be used within the next ten years. There are additional tax loss carryforwards amounting to €1,652 million (previous year: €1,341 million) that can be used within a period of 15 or 20 years. Tax loss carryforwards of €9,002 million (previous year: €9,885 million), of which €478 million (previous year €724 million) can only be utilized subject to restrictions within the next 20 years, were estimated not to be usable overall.

The benefit arising from previously unrecognized tax losses or tax credits of a prior period that is used to reduce current tax expense amounts to €247 million (previous year: €67 million). Deferred tax expense was reduced by €15 million (previous year: €37 million) because of a benefit arising from previously unrecognized tax losses and tax credits of a prior period. Deferred tax expense arising from the write-down of deferred tax assets amounts to €203 million (previous year: €342 million). Deferred tax income arising from the reversal of a write-down of a deferred tax asset amounts to €92 million (previous year: €1 million).

Tax benefits amounting to €785 million (previous year: €741 million) were recognized because of tax credits granted by various countries.

No deferred tax assets were recognized for deductible temporary differences of €620 million (previous year: €455 million) and for tax credits of €448 million (previous year: €409 million) that would expire in the next 20 years, or for tax credits of €103 million (previous year: €45 million) that will not expire.

Due to the change in the statutory provisions in Germany, a refund claim for corporation tax was recognized as a current tax asset for the first time in fiscal year 2006. The present value of the refund claim was €496 million at the balance sheet date (previous year: €600 million).

Deferred tax income resulting from changes in tax rates amounted to €94 million at Group level (previous year:  €133 million).

Deferred taxes of €411 million (previous year: €437 million) were recognized without being offset by deferred tax liabilities in the same amount. The companies concerned expect positive tax income in future following losses in the fiscal year under review or in the previous year.

€1.394 million (previous year: €2,678 million) of the deferred taxes recognized in the balance sheet was credited to equity and relates to other comprehensive income. €31 million of this figure (previous year: €56 million) is attributable to noncontrolling interests. There were effects from capital transactions with noncontrolling interest shareholders in the reporting period and the prior-year period. Changes in deferred taxes classified by balance sheet item are presented in the statement of comprehensive.

In the reporting period, tax effects of €58 million resulting from equity transaction costs were credited directly to the capital reserves.

Deferred taxes recognized directly in equity in the fiscal year are presented in detail in the statement of comprehensive income.

DEFERRED TAXES CLASSIFIED BY BALANCE SHEET ITEM

The following recognized deferred tax assets and liabilities were attributable to recognition and measurement differences in the individual balance sheet items and to tax loss carryforwards:

In accordance with IAS 12, deferred tax assets and liabilities are offset if, and only if, they relate to income taxes levied by the same taxation authority and relate to the same tax period.

The tax expense of €3,283 million reported for 2013 (previous year: €3,606 million) was €383 million (previous year: €3,913 million) lower than the expected tax expense of €3,666 million that would have resulted from application of a tax rate applicable to undistributed profits of 29.5% to the profit before tax of the Group.

The income and expenses reported in the “Other taxation changes” item in the previous years are presented in greater detail in fiscal year 2013. The prior-year figures were adjusted to reflect this change in presentation.