11. 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

12M 2012

9M 2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

Taxes paid or owed

528

232

thereof Germany

(161)

(67)

thereof international

(367)

(165)

thereof tax expenses/income of current period

(516)

(240)

thereof tax expenses/income of previous periods

(12)

(–8)

Deferred taxes1

186

28

thereof Germany1

(103)

(–9)

thereof international1

(83)

(37)

 

714

260

This section includes a comparison of current amounts with the amounts as of 31 December 2012 as a comparison with the nine-month period in 2012 is not possible. The reason is that taxes are determined during quarterly reporting under the rules of interim reporting using the so-called integral approach. According to this approach, recognised tax expenses correspond to the projected annual tax rate. As a result, a detailed actual tax calculation for the nine-month period in 2012 is not available.

The income tax rate of the German companies of METRO GROUP consists of a corporate income tax of 15.00 per cent plus a 5.50 per cent solidarity surcharge on corporate income tax as well as the trade tax of 14.70 per cent given an average assessment rate of 420.00 per cent. All in all, this results in an aggregate tax rate of 30.53 per cent. 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 per cent (tax holidays) to 36.15 per cent (12M 2012: 40.69 per cent).

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 does not include any effect from changes in tax rates (12M 2012: expenses of €2 million).

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€ million

12M 2012

9M 2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

Deferred taxes in the income statement1

186

28

thereof from temporary differences1

(142)

(21)

thereof from loss and interest carry-forwards

(44)

(7)

At €260 million (12M 2012: €714 million), income tax expenses, which are fully included in the result from ordinary operations, are €202 million (12M 2012: €461 million) higher than the expected tax expenses of €58 million (12M 2012: €253 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 is as follows:

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€ million

12M 2012

9M 2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

Earnings before taxes EBT1

829

189

Expected income tax expenses (30.53%)1

253

58

Effects of differing national tax rates1

–64

–47

Tax expenses and income relating to other periods

12

–8

Non-deductible business expenses

127

77

Effects of not recognised or impaired deferred taxes

314

187

Additions and reductions for local taxes

19

16

Tax holidays

–5

–8

Other deviations

58

–15

Income tax expenses according to the income statement1

714

260

Group tax rate (in %)1

86.15

137.81

The disproportionately high tax rate in the short financial year 2013 can largely be attributed to the lower pre-tax result that is due to the fact that the Christmas business is not included. By contrast, tax expenses will be relatively high because no tax benefit from the measurement of current domestic tax losses was considered. The positive effect of other deviations in the short financial year 2013 is primarily due to the deconsolidation of the Real business in Eastern Europe.

In 2012, the high amount of not recognised or impaired deferred taxes was due 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 significant change in other deviations in 2012 is largely due to the tax-exempt divestment of the cash & carry business in the United Kingdom.