18. Income Taxes
| (in TEUR) | 2007 | 2006 |
| Current tax expense | (43,326) | (45,107) |
| Changes in deferred taxes charged to the income statement | (18,589) | 535 |
| (61,915) | (44,572) |
Income taxes tax expense (Download size 20 KB)
Changes in the deferred income tax account consist of the following:
| (in TEUR) | 2007 | 2006 |
| Deferred tax assets | 58,969 | 21,845 |
| Liabilities for deferred taxes | (80,093) | (45,036) |
| Balance as at 31 December, as previously stated | (21,124) | (23,191) |
| Deferred tax relating to the origination and | ||
| reversal of temporary differences | ||
| income statement charge | (18,589) | 535 |
| charged to equity | (2,909) | 1,532 |
| (42,622) | (21,124) | |
| thereof | ||
| Deferred tax assets | 56,982 | 58,969 |
| Liabilities for deferred taxes | (99,604) | (80,093) |
Income taxes deferred taxes (Download size 20 KB)
The reconciliation of the effective tax rate to the tax rate used is as follows:
| (in TEUR) | 2007 | 2006 |
| Earnings before taxes (EBT) | 198,022 | 165,925 |
| Tax at the applicable tax rate (25% in 2007 and 25% in 2006) | (49,506) | (41,481) |
| Non-deductable amortization of goodwill | (859) | 0 |
| Tax effect of | ||
| adjustment of using new tax rates | 1,237 | 509 |
| other changes | (12,787) | (3,600) |
| (61,915) | (44,572) | |
| Current tax expense | (43,326) | (45,107) |
| Changes in deferred taxes charged to the income statement | (18,589) | 535 |
Income taxes tax rate (Download size 21 KB)
The other changes refer mainly to changes of valuation allowances of deferred tax assets.
Deferred tax assets and liabilities for deferred taxes as at December 31, 2007 and 2006 are the result of the following temporary valuation differences between book values in the IFRS consolidated financial statements and the relevant tax bases:
| 2007 | 2006 | ||||||
| Deferred tax | Deferred tax | ||||||
| (in TEUR) | Assets | Liabilities | Assets | Liabilities | |||
| Intangible assets | 3,240 | (12,256) | 1,805 | (12,226) | |||
| Property, plant and equipment | 2,947 | (22,351) | 2,945 | (11,760) | |||
| Financial assets | 7 | (7,340) | 7 | (10,108) | |||
| Inventories | 318,260 | (4,621) | 268,518 | (2,065) | |||
| Receivables | 9,793 | (72,483) | 2,733 | (47,223) | |||
| Marketable securities and shares | 0 | (281) | 0 | (182) | |||
| Other assets | 121 | (2) | 190 | (93) | |||
| 334,368 | (119,334) | 276,198 | (83,657) | ||||
| Provisions | 62,332 | (28,496) | 56,317 | (36,198) | |||
| Liabilities | 20,067 | (323,023) | 22,466 | (275,355) | |||
| Deferred income | 129 | 0 | 27 | (13) | |||
| 82,528 | (351,519) | 78,810 | (311,566) | ||||
| Tax loss carry-forwards | 63,073 | 0 | 60,264 | 0 | |||
| Deferred tax assets/liabilities | 479,969 | (470,853) | 415,272 | (395,223) | |||
| Valuation allowance for deferred tax assets | (51,738) | 0 | (41,173) | 0 | |||
| Offset within legal tax units and jurisdiction | (371,249) | 371,249 | (315,130) | 315,130 | |||
| Net deferred tax assets and liabilities | 56,982 | (99,604) | 58,969 | (80,093) | |||
Income taxes temporary valuation differences (Download size 24 KB)
In assessing the recoverability of deferred tax assets, management considers whether it is probable that all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Executive Board considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Executive Board believes it is probable that the Company will realize the benefits of the recognized deductible differences and operating loss carry-forwards.