10. Income taxes

Income taxes include taxes on income paid or owed in the individual countries as well as deferred taxes.

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€ million

2011

2012

Taxes paid or owed

741

528

thereof Germany

(174)

(161)

thereof international

(567)

(367)

thereof tax expenses/income of current period

(639)

(516)

thereof tax expenses/income of previous periods

(102)

(12)

Deferred taxes

–9

181

thereof Germany

(50)

(101)

thereof international

(–59)

(80)

 

732

709

The income tax rate of the German companies of METRO GROUP consists of a corporate income tax of 15.00 percent plus a 5.50 percent solidarity surcharge on corporate income tax as well as the trade tax of 14.70 percent given an average assessment rate of 420.00 percent. All in all, this results in an aggregate tax rate of 30.53 percent. The tax rates are unchanged from the previous year. The income tax rates applied to foreign companies are based on the respective laws and regulations applying in the individual countries and vary in a range from 0.00 percent (tax holidays) to 40.69 percent. These tax rates are also unchanged from the previous year.

Deferred taxes are determined on the basis of the tax rates expected in each country upon realisation. In principle, these are based on the valid laws or legislation that has been passed at the time of the closing date.

Deferred tax income for the financial year 2012 includes an effect of €2 million from changes in tax rates (previous year: €1 million).

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€ million

2011

2012

Deferred taxes in the income statement

–9

181

thereof from temporary differences

(–39)

(137)

thereof from loss and interest carry-forwards

(30)

(44)

At €709 million (previous year: €732 million), income tax expenses, which are fully included in the result from ordinary operations, are €462 million higher (previous year: €282 million) than the expected tax expenses of €247 million (previous year: €450 million) that would have resulted if the German corporate income tax rate had been applied to the Group’s taxable income for the year.

Reconciliation of estimated to actual income tax expenses:

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€ million

2011

2012

Earnings before taxes

1,473

810

Expected income tax expenses (30,53%)

450

247

Effects of differing national tax rates

–101

–63

Tax expenses and income relating to other periods

102

12

Non-deductible business expenses

102

127

Effects of not recognised or impaired deferred taxes

203

314

Additions and reductions for local taxes

27

19

Tax holidays

–24

–5

Other deviations

–27

58

Income tax expenses according to the income statement

732

709

Effective tax rate (in %)

49.71

87.48

The increase in not recognised or impaired deferred taxes is due, in particular, to expenses in connection with the sale of Real’s Eastern European business, Media Markt’s decision to exit the Chinese market and several restructuring programmes at METRO GROUP in Germany. These expenses were not measured with deferred taxes. The disproportionate increase in the tax rate must also be considered in this context. The change in other deviations is largely due to the tax-exempt divestment of the cash & carry business in the United Kingdom.