25. Deferred tax assets/deferred tax liabilities

Deferred taxes on tax loss carry-forwards and temporary differences amount to €1,466 million before netting (30/9/2014: €1,762 million), a decline of €296 million compared with 30 September 2014. The carrying amounts of deferred tax liabilities declined by €173 million to €884 million compared with the previous year (30/9/2014: €1,057 million).

The decline in deferred tax assets and deferred tax liabilities on tax loss carry-forwards and temporary differences is essentially due to the deconsolidation of the Galeria Kaufhof group.

Deferred taxes relate to the following balance sheet items:

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30/9/2014

30/9/2015

 

 

 

 

 

€ million

Asset

Liability

Asset

Liability

Goodwill

152

170

110

161

Other intangible assets

101

73

73

83

Property, plant and equipment and investment properties

156

596

138

468

Financial investments and investments accounted for using the equity method

5

2

4

3

Inventories

70

18

62

10

Other financial and non-financial assets

115

60

57

56

Assets held for sale

0

0

0

2

Provisions for pensions and similar obligations

368

62

281

53

Other provisions

96

7

101

11

Borrowings

369

6

351

1

Other financial and non-financial liabilities

131

63

139

32

Liabilities related to assets held for sale

0

0

0

0

Outside basis differences

0

0

0

4

Write-downs of temporary differences

−106

0

−89

0

Loss carry-forwards

304

0

240

0

Total

1,762

1,057

1,466

884

Offset

−927

−927

−742

−742

Carrying amount of deferred taxes

835

130

724

142

Of the deferred tax assets shown, €390 million (30/9/2014: €492 million) is attributable to the incorporated companies of METRO AG. Based on business planning, realisation of this tax asset is to be considered sufficiently probable. The implementation of a new transfer price system in the METRO Cash & Carry segment as of 1 October 2015 had a positive effect on the impairment test for deferred taxes as it allowed for the compensation of opposite tax effects in connection with the deconsolidation of the Galeria Kaufhof group in particular.

In accordance with IAS 12 (Income Taxes), deferred tax liabilities relating to differences between the carrying amount of a subsidiary’s pro rata assets and liabilities in the balance sheet and the carrying amounts of the investments for this subsidiary in the parent company’s tax statement must be capitalised (so-called outside basis differences) if the tax benefit is likely to be realised in the future. The differences can primarily be attributed to retained earnings of subsidiaries in Germany and abroad. No deferred taxes were recognised for these retained earnings as they will be reinvested over an indefinite period of time or are not subject to relevant taxation. Any dividends paid by subsidiaries would be subject to a dividend tax of 5 per cent. In addition, foreign dividends may trigger a withholding tax. As of 30 September 2015, €4 million (30/9/2014: €0 million) in deferred tax liabilities from outside basis differences were recognised for planned dividend payments. There were no circumstances leading to a corresponding deferral during the previous year. Due to the hierarchical structure of METRO GROUP, the determination of the taxable temporary differences would require undue efforts.

No deferred tax assets were capitalised for the following tax loss carry-forwards and interest carry-forwards or temporary differences because realisation of the assets in the short-to-medium term is not expected:

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€ million

30/9/2014

30/9/2015

Corporate tax losses

7,896

8,027

Trade tax losses

7,908

7,865

Interest carry-forwards

19

15

Temporary differences

415

364

The losses primarily concern Germany. They can be carried forward without limitation.

Tax effects on components of other comprehensive income

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2013/14

2014/15

 

 

 

 

 

 

 

€ million

Before taxes

Taxes

After taxes

Before taxes

Taxes

After taxes

Currency translation differences from translating the financial statements of foreign operations

−30

−7

−37

−183

−3

−186

thereof currency translation differences of net investments in foreign operations

(−68)

(−7)

(−75)

(−9)

(−3)

(−12)

Effective portion of gains/losses from cash flow hedges

21

−3

18

−12

2

−10

Gains/losses on remeasuring financial instruments in the category “available for sale”

−70

0

−70

0

0

0

Deferred taxes on the remeasurement of defined benefit pension plans

−256

41

−215

90

−31

59

Other changes

0

0

0

0

0

0

Remaining income tax on other comprehensive income

0

−4

−4

0

1

1

 

−335

27

−308

−105

−31

−136

 

 

 

 

 

 

 

As a result of non-taxable events as well as the non-recognition and impairment of deferred taxes, the recognised tax does not correspond to the estimated tax for each item.