18. Income tax

Paid or outstanding income taxes and deferred taxes are shown under the item income taxes. Income taxes are made up of corporation tax, a solidarity surcharge and trade tax. Limited companies domiciled in Germany pay corporation tax of 15.0 % and a solidarity surcharge of 5.5 % of the corporation tax expense. These companies and German-based subsidiaries in the legal form of limited partnerships are also liable for trade tax, which is imposed at different local rates. Trade tax does not reduce the amount of a limited company’s profits on which corporation tax is payable.

Current income tax expenses include tax income from other accounting periods amounting to € 517 thousand (previous year: € 1,131 thousand).

Deferred tax assets and liabilities result from temporary differences and tax loss carry-forwards.

Deferred taxes are calculated on the basis of the tax rates currently in force in Germany or those expected to apply at the time of realisation. A tax rate of 32.28 % was used for the calculations in both 2018 and 2017. This is made up of corporation tax at 15.0 %, a solidarity surcharge of 5.5 % of the corporation tax, and the trade tax payable in Hamburg of 16.45 %. Limited partnerships are also liable for trade tax. Due to special rules, property management companies generally do not pay trade tax. Due to rules on minimum taxation, tax loss carry-forwards are only partially usable in Germany. Tax losses of up to € 1 million can be set off against taxable profits without restriction, and higher tax losses up to a maximum of 60 %.

The effects of tax rates for domestic and foreign taxes that diverge from the Group parent company’s tax rate are reported in offsetting and reconciliation under differences in tax rates.

Deferred tax assets are recognised on tax loss carry-forwards and temporary differences if it is sufficiently certain that they can be realised in the near future. The Group has no domestic corporation tax loss carry-forwards and no domestic trade tax loss carry-forwards. Deferred taxes of € 1,436 thousand (previous year: € 18 thousand) are recognised on foreign tax loss carry-forwards of € 7,560 thousand (previous year: € 96 thousand). No deferred tax assets are recognised for domestic corporation tax loss carry-forwards of € 515 thousand (previous year: € 1,374 thousand), domestic trade tax loss carry-forwards of € 7,969 thousand (previous year: € 5,383 thousand) and foreign tax loss carry-forwards of € 11,244 thousand (previous year: € 22,238 thousand). Under current legislation, tax losses can be carried forward in Germany without restriction.

Deferred tax assets of € 21,538 thousand (previous year: € 25,249 thousand) recognised directly in equity without effect on profit and loss come from actuarial gains and losses on pension provisions, cash flow hedges and unrealised gains/losses arising from available-for-sale financial assets.