Technologies · Systems · Solutions - Dürr

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17. Income taxes
Earnings before taxes totaled € 11,814 thousand (2003: € –5,707 thousand). Income taxes break
down as follows:
Amounts in €k
2004 2003
Current taxes
Germany 813 2,015
Foreign
Deferred taxes
2,864 9,508
Germany 2,715 11,763
Foreign 715 1,326
of which special expenses in connection
7,107 24,612
with discontinued operations 2,444 2,251
The income taxes include the domestic corporate income tax including a solidarity surcharge
and trade taxes on income. Comparable taxes of foreign subsidiaries are also shown under this
position.
Owing to the German Tax Reduction Act passed in October 2000, the corporate income tax rate
came to 25.0% (2003: 26.5% due to the law to assist flood victims in Germany) plus a solidarity
surcharge of 5.5% for the 2004 reporting period. This results in a nominal corporate income tax
rate of 26.38% (2003: 27.96%). Including German trade tax, the total tax burden amounted to
39.0% (2003: 40.2%).
There were no major changes in tax expenses due to changes in the respective local tax rates.
For the 2004 reporting period, Dürr has disclosed expenses from taxes on income of € 7,107 thousand
(2003: € 24,612 thousand). As a result of accumulated losses in the past three years in
certain tax jurisdictions, Dürr did not record any deferred tax assets in the 2003 reporting period
on unused tax loss totaling € 22,984 thousand. In the consolidated financial statements as of
December 31, 2003, which were prepared according to US GAAP, the deferred tax assets for
unused tax losses of € 22,984 thousand were recognized and written off in full. In tax jurisdictions
with positive results Dürr has disclosed tax expenses.
Dürr evaluates the deferred taxes regularly. The ability to recognize tax income from deferred
taxes depends on the possibility of generating taxable income in the future and using up
unused tax losses before they expire.
As of the balance sheet date, deferred tax assets on unused tax losses of € 25,572 thousand
(2003: € 22,357 thousand) were recognized at companies which sustained losses in the current
and prior period. Based on past experience, only tax income in the near future is considered in
the valuation of deferred tax assets.
The special expenses in connection with discontinued operations are the result of devaluations
of deferred tax assets for any unused tax losses carried forward. The special expenses are disclosed
in continuing operations as the deferred tax assets are accounted for there.