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DES - Online Annual Report 2009

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Tax reconciliation

The income taxes in the amount of €5,711 thousand in the year under review are derived as follows from an expected income tax expense that would have resulted from the application of the parent company’s statutory income tax rate to the profit before tax. This was calculated using a corporation tax rate of 15% plus the 5.5% solidarity surcharge.

in € thousands 2009 2008
Consolidated profit before income tax 40,079 86,934
Theoretical income tax 15.825% -6,343 -13,757
Tax rate differences for foreign Group companies -656 -1,906
Foreign tax expense incurred in prior periods 0 -2,601
Tax-free income 906 0
Divergent domestic tax -33 -52
Reversal due to tax rate reduction abroad 199 0
Others 216 198
Current income tax -5,711 -18,118

Deutsche EuroShop AG is a commercial enterprise by virtue of its legal form, and its trade income is subject to trade tax.

However, since 2003 Deutsche EuroShop AG has met the requirements for the extended reduction of trade tax in accordance with section 9 (1) sentence 2 of the Gewerbesteuergesetz (GewStG – Trade Tax Act). As a result, no significant trade tax payments have been made to date.

At present, the trade tax is only applied to income not covered by the extended reduction of trade tax, such as interest income. In the current year, €33 thousand in trade tax expense was included in the current tax expense.

The effect arising from tax-free income is the result of recognising the excess of identified net assets over cost of acquisition (which is not relevant for tax purposes) in accordance with IFRS 3 from the acquisition of the share in City-Point Kassel GmbH & Co. KG.

In financial year 2009, the effective income tax rate was 14% (previous year: 21%).

Continue reading: Notes to the consolidated cash flow statement

Back to: 29. Income tax expense