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104 being focused: being better
20. Deferred taxes
Deferred tax assets and liabilities are shown in the balance sheet in accordance with SFAS
No. 109 “Accounting for Income Taxes” if future tax effects are expected to result from temporary
differences between balance sheet carrying values and their tax balance sheet values on
the one hand, and from losses carried forward on the other.
Taxes on income which apply to the Group are summarized below:
Current taxes
2002 2001
‘000 euros ‘000 euros
German 3,561 2,033
Non-German 12,134 10,182
Deferred taxes
German – 3,024 – 6,972
Non-German 529 3,937
Total 13,200 9,180
Long-term deferred taxes were recognized on the basis of an overall tax rate of 37.5 percent
(2001: 38.0 percent). This comprises corporate income tax of 26.4 percent (2001: 26.4 percent),
including the German unification solidarity surcharge, and an average municipal trade
tax rate for German companies of 11.1 percent (2001: 11.6 percent). Short-term deferred
taxes expected to be reversed in the next fiscal year are recognized at 38.8 percent (2001:
38.0 percent) in the wake of the German Flood Disaster Solidarity Act. This calculation is
based on a corporate income tax rate including German unification surcharge of 28.0 percent
(2001: 26.4 percent) and an average municipal trade tax rate of 10.8 percent (2001: 11.6 percent).
The average municipal tax rate for short-term deferred taxes differs from the rate for
long-term deferred taxes, as the effect of setting off municipal tax against high-rate corporate
income tax is correspondingly higher. As a result of tax rate changes in fiscal 2002 deferred
tax assets came to 630 thousand euros (2001: zero).
Foreign companies are calculated at their domestic corporate income tax rates.