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DES - Online Annual Report 2008

Tax reconciliation

The income taxes in the amount of 118,118 thousand during the period 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 2008 2007
Consolidated profit before income tax 86,934 77,838
Theoretical income tax 15.825% -13,757 -12,318
Tax rate differences for foreign Group companies -1,906 -695
Foreign tax expense incurred in prior periods -2,601 0
Others 146 -330
Effective income tax -18,118 -13,343
Reversal due to tax rate reduction 0 29,687
Current income taxes -18,118 16,344

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 Gewerbsteuergesetz (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, €52 thousand in trade tax expense was included in the effective tax expense.

In financial year 2008, the effective income tax rate was 21%.

Continue reading: Disclosures on the consolidated cash flow statement

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