12. Income taxes

Income taxes comprise income taxes paid or owed and deferred taxes. Income tax expense including deferred taxes is made up as follows:

    T 044
     
in € thousand 2014/15 2013/14
     
Current taxes 85,923 27,012
Deferred taxes (50,047) (13,560)
     
  35,876 13,452
     
Prior-year figures have been adjusted (see Changes in accounting and measurement methods due to new standards and interpretations).

The tax credit from deferred taxes in the amount of € 50,047 thousand results from the change in temporary balance sheet differences.

The tax expense includes current taxes of € 616 thousand relating to prior years (previous year: € 1,023 thousand) as well as deferred taxes relating to prior years (deriving from corrections to the tax-based figures) of € 647 thousand (previous year: € 347 thousand).

Applicable German tax legislation for fiscal year 2014/15 foresees a statutory corporate income tax rate of 15 % (previous year: 15 %), plus a solidarity surcharge of 5.5 % (previous year: 5.5 %). The trade tax rate at Aurubis AG amounts to 16.59 % (previous year: 16.59 %) of the taxable income. Trade tax rates of between 11.09 % and 17.33 % are applicable for the other German group companies (previous year: between 10.76 % and 17.33 %). The foreign companies are subject to their respective national income tax rates, which vary between 10 % and 35.98 % (previous year: 10 % and 45.88 %). The “notional interest deduction” is a special feature to be observed under Belgian tax law, which results in a lower assessment basis for the current taxes of Aurubis Belgium in the reporting period of € 18,459 thousand (previous year: € 15,918 thousand).

In accordance with IAS 12.81 (c), the actual total tax expense has to be reconciled to the tax charge that would have resulted if the theoretical tax rates were applied to the reported consolidated pre-tax earnings.

The Group taxes include tax effects from foreign subsidiaries to a significant degree. As a consequence, the tax rate of the German parent company (32.42 %; previous year: 32.42 %) is not applied, but a group-wide mixed tax rate of 19.49 % (previous year: 8.47 %).

The change in the average group tax rate results from significant changes in the distribution of the companies’ contributions to total earnings as compared to the prior year. In contrast to the prior year, the main contributions to earnings resulted from Aurubis AG and Aurubis Bulgaria in roughly equal amounts.

Reconciliation:

    T 045
     
in € thousand 2014/15 2013/14
     
Earnings before taxes 169,444 57,552
Theoretical tax charge at 19.49 %
(previous year: 8.47 %)
33,025 4,873
     
Changes in the theoretical tax charge due to:    
– changes in tax rate 11 (239)
– non-recognition and correction of deferred taxes 2,944 7,568
– taxes for previous years 1,263 1,370
– non-deductible expenses 5,352 5,323
– non-taxable income (317) (258)
– notional interest deduction (Belgium) (6,274) (5,411)
– outside basis differences (76) (230)
– effects deriving from consolidation of items using the equity method (59) 390
– other 7 66
     
Income taxes 35,876 13,452
      
Certain prior-year figures have been adjusted (see Changes in accounting and measurement methods due to new standards and interpretations).

The effects deriving from the non-recognition and correction of deferred taxes mainly result from the non-recognition of deferred tax assets on the losses of Aurubis Netherlands BV during the fiscal year.

The recognized deferred tax assets and deferred tax liabilities result from the following recognition and measurement differences in individual items in the statement of financial position, from tax loss carryforwards and from outside basis differences (OBD):

        T 046
         
  9/30/2015 9/30/2014
         
in € thousand Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
         
Intangible assets 3,717 204 4,302 459
Property, plant and equipment 1,062 114,875 664 116,711
Financial fixed assets 2 0 2 0
Financial fixed assets accounted for using the equity method 31 2,429 27 2,890
Inventories 27,596 178,156 24,842 212,778
Receivables and other assets 779 42,422 1,438 34,968
Pension provisions 55,698 4,152 59,617 5,353
Other provisions 8,288 400 8,569 320
Liabilities 71,030 14,014 53,304 7,454
Tax loss carryforwards 14,494 0 7,676 0
Outside basis differences 0 951 0 1,028
Offsetting (174,617) (174,617) (157,661) (157,661)
         
Per consolidated statement of financial position 8,080 182,986 2,780 224,300
          
Prior-year figures have been adjusted (see Changes in accounting and measurement methods due to new standards and interpretations).

Altogether, € 28,374 thousand of the deferred tax assets (previous year: € 26,280 thousand) and € 220,578 thousand of the deferred tax liabilities (previous year: € 247,746 thousand) will be realized within the next 12 months. Deferred tax assets of € 154,323 thousand (previous year: € 134,162 thousand) and deferred tax liabilities of € 137,025 thousand (previous year: € 134,215 thousand) will be realized after more than 12 months. These figures represent the amounts prior to offsetting.

The following table shows the deferred and current taxes that directly decreased or increased the other comprehensive income (OCI) and accordingly equity:

        T 047
         
  9/30/2015 9/30/2014
         
in € thousand Balance Change Balance Change
         
Deferred taxes        
Derivatives 7,575 1,683 5,892 4,771
Pension provisions 8,202 (5,556) 13,758 25,498
         
Total 15,777 (3,873) 19,650 30,269
         
Current taxes (1,033) 78 (1,111) (601)
Currency differences (886) (254) (632) (632)
          
Prior-year figures have been adjusted (see Changes in accounting and measurement methods due to new standards and interpretations).

Furthermore, there were changes affecting net income, amounting to € 693 thousand (previous year: € 329 thousand) in the individual deferred tax positions of the foreign subsidiaries due to exchange rates.

Deferred tax assets are only recognized to the extent to which the respective benefits will probably be realized. Based on the forecast profit expectations of the subsidiaries, it is probable that the tax loss carryforwards will be utilized in conformity with IAS 12.34.

Total tax loss carryforwards amount to € 156,839 thousand (previous year: € 121,610). No deferred tax assets have been recognized on trade tax loss carryforwards of € 100,003 thousand (previous year: € 83,657 thousand), as the possibility of utilizing them is believed to be unlikely from a current perspective. Of the tax loss carryforwards deemed not to be utilizable, an amount of € 33,363 thousand (previous year: € 33,733 thousand) can be carried forward indefinitely, an amount of € 26,395 thousand (previous year: € 22,528 thousand) can be utilized within the next seven years and an amount of € 40,246 thousand (previous year: € 27,396 thousand) can be utilized within the next nine years.

The recognition of corporate income tax credits and increases on account of Section 37 German Corporate Income Tax Act (KStG) resulted in net income of € 72 thousand in the year under review (previous year: € 94 thousand).

Deferred tax liabilities of € 951 thousand (previous year: € 1,028 thousand) were set up in respect of the differences between the proportional equity of subsidiaries recognized in the con­solidated statement of financial position and the investment carrying amounts for these subsidiaries shown in the tax-based records of the respective parent company (so-called outside basis differences) as at the balance sheet date. No deferred tax liabilities were set up for outside basis differences deriving from undistributed earnings of subsidiaries, amounting to € 14,144 thousand (previous year: € 19,365 thousand), since the reversal of these differences is unlikely in the foreseeable future.