Tax reconciliation

Income taxes in the amount of €15,180 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 € thousand 2010 2009
Consolidated profit before income tax 96,998 40,079
Theoretical income tax 15.825% -15,350 -6,343
Tax rate differences for foreign Group companies -631 -656
Tax-free income / non-deductible expenses 1,001 1,151
Divergent domestic tax -202 -33
Aperiodic tax income 52 0
Reversal due to tax rate reduction abroad 0 199
Other -50 -29
Current income tax -15,180 -5,711

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, €202 thousand in trade tax expense was included in the current tax expense.

The effect arising from tax-free income is largely the result of recognising the excess of identified assets over cost of acquisition (which is not relevant for tax purposes) in accordance with IFRS 3 from the acquisitions of shares in DB Immobilienfonds 12 Main-Taunus-Zentrum Wieland KG.

In financial year 2010, the effective income tax rate was 15.6% (previous year: 14.2%). The previous year’s figures have been adjusted with regard to tax-free income / non-deductible expenses in the amount of €245 thousand.

Continue reading: Notes to the consolidated cash flow statement

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