talanx group annual report 2011 en

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270 Financial statements Notes General information Talanx Group. Annual Report 2011 Accounting principles and policies (35) Taxes on income Segment reporting Consolidation, business combinations Non-current assets held for sale and disposal groups On the basis of a decision of the German Federal Fiscal Court (BFH) in October 2010 regarding the taxation of investment income generated by the Group’s reinsurance subsidiaries domiciled in Ireland as foreign-sourced income pursuant to the German Foreign Transactions Tax Act (AStG), taxes already paid for earlier years were in large measure refunded in the first quarter. Assessments regarding the taxation of foreign-sourced income for the companies Hannover Reinsurance (Ireland) Ltd. and Hannover Life Reassurance (Ireland) Ltd. were rendered immaterial by cancellation notices dated 8 February 2011 and 31 March 2011, respectively. Subsequent assessment notices regarding corporation tax were issued for Hannover Re and E+S Rück in the period under review. The trade tax effects were also offset in the third quarter of 2011 by the controlling company HDI Haftpflichtverband der Deutschen Industrie V. a. G. In total, after allowance for non-controlling interests in equity, the refund of taxes and interest resulted in an improvement of EUR 64 million in Group net income in the period under review. This item includes both domestic income tax and comparable taxes on income incurred by foreign subsidiaries. The determination of the income tax includes the calculation of deferred taxes. The principles used to recognise deferred taxes are set out in the section entitled “Summary of major accounting policies”. Deferred taxes are established on retained earnings of major affiliated companies in cases where a distribution is concretely planned. The actual and deferred taxes on income can be broken down as follows: Income tax 2011 2010 1) Figures in EUR million Actual tax for the year under review 316 416 Actual tax for other periods –81 –79 Deferred taxes due to temporary differences –10 –24 Deferred taxes from loss carry-forwards –42 –82 Change in deferred taxes due to changes in tax rates 4 — Recognised tax expenditure 187 231 1) Adjusted on the basis of IAS 8 Domestic/foreign breakdown of recognised tax expenditure/income 2011 2010 1) Figures in EUR million Current taxes 235 337 Germany 140 249 Outside Germany 95 88 Deferred taxes –48 –106 Germany –5 –123 Outside Germany –43 17 Total 187 231 1) Adjusted on the basis of IAS 8
Nature of risks Notes on the balance Notes on the balance sheet – assets sheet – liabilities Notes on the consolidated statement of income Other information List of shareholdings The actual and deferred taxes recognised directly in equity in the financial year – resulting from items charged or credited directly to equity – amounted to EUR –33 (–20) million. The following table presents a reconciliation of the expected expense for income taxes that would be incurred upon application of the German income tax rate to the pre-tax profit with the actual expense for taxes. Reconciliation of expected and recognised income tax expenses 2011 2010 1) Figures in EUR million Profit before income taxes 1,084 898 Expected tax rate 31.6% 31.6% Expected expense for income taxes 343 284 Change in deferred rates of taxation 4 — Taxation differences affecting foreign subsidiaries –35 –42 Non-deductible expenses 128 115 Tax-exempt income –159 –83 Value adjustment 6 25 Tax expense not attributable to the reporting period –136 –84 Other 36 16 Recognised expense for income taxes 187 231 1) Adjusted on the basis of IAS 8 The calculation of the expected expense for income taxes is based on the German income tax rate of 31.6 (31.6)%. This tax rate is made up of corporate income tax including the German reunification charge and a mixed trade tax rate. The tax ratio, i.e. the ratio of recognised tax expense to pre-tax profit, stood at 17.3 (25.8)% in the year under review. The tax rate corresponds to the average income tax load borne by all Group companies. No deferred taxes were established on taxable temporary differences in connection with shares in Group companies amounting to EUR 136 (111) million as the Group is able to direct their reversal and they will not reverse in the foreseeable future. Deferred taxes from loss carry-forwards are capitalised as long as it is highly likely that sufficient future taxable income will be available for realisation. Companies that have incurred tax losses in the current fiscal year or in the previous year have carried an excess of deferred tax assets or liabilities of EUR 100 million. The unadjusted deferred taxes that are not capitalised on loss carry-forwards in an amount totalling EUR 167 million are likely to be realised in the amount of EUR 44 million within a year and in the amount of EUR 123 million after one year. Talanx Group. Annual Report 2011 271
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Group Annual Report 2011 Straightfo
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OuR VISION Talanx is the leading gl
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Our brands HDI-Gerling focuses part
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By contrast with the technical acco
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Dr. Heinz-Peter Roß Torsten Leue D
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Supervisory Board Committees Compos
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A further focus of our deliberation
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The annual financial statements are
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You can stand and work better on a
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Re-launch with a modern and efficie
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Forward together with a goal-orient
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under its own power and through acq
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Our targets: ambitious, but achieva
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Our premium volume has risen steadi
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Our target: to be fit for the futur
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Group management report. Detailed i
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Overall assessment of the economic
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Nature of risks Notes on the consol
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Nature of risks Notes on the balanc
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Page 223 and 224: Nature of risks Notes on the balanc
Page 273: Nature of risks Notes on the balanc
Page 297 and 298: Our Locations Argentina L’UNION d
Page 299 and 300: Italy Hannover Re Services Italy S.
Page 301 and 302: Glossary. A-C Accumulation risk Und
Page 303 and 304: L-P Lapse rate for life insurance p
Page 305 and 306: Index of key terms Acquisitions Cen
Page 307 and 308: ie Ireland. Hannover Life Re (Irela
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talanx group annual report 2011 en

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