Audi 2006 Annual Report Download - page 184

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The current taxes in Germany are calculated at the tax rate of 38.3 (38.3) percent. This
represents the sum of the corporate income tax rate of 25.0 percent, the solidarity surcharge
of 5.5 percent and the average trade earnings tax rate for the group. Deferred taxes are like-
wise calculated at a rate of 38.3 percent in the financial year under review, as in the previous
year.
The national income tax rates applicable for foreign companies range from 0 percent to
40 percent.
Due to the current statutory framework in Hungary, the deferred tax assets for AUDI
HUNGARIA MOTOR Kft. for tax relief on capital investments were reduced by EUR 86 million,
as no taxable income is expected until tax exemption expires in 2011. The effects arising as a
result of the tax benefits on research and development expenditure in Hungary are reported
in the reconciliation accounts under tax-exempt income.
There exist loss carryforwards totalling EUR 94 million, of which an amount of EUR 88
million can be used indefinitely. The realisation of tax losses resulted in a reduction of
EUR 20 (15) million in current income tax expense in the 2006 financial year. Deferred tax
assets totalling EUR 88 million were not carried for reasons of impairment. Unused tax loss
carryforwards accounted for EUR 2 million of this amount, and tax rebates for the remaining
EUR 86 million.
Deferred tax totalling EUR – 282 (194) million relates to business transactions reported
directly in equity. One portion amounting to EUR – 109 (123) million relates to defined bene-
fit liabilities and another portion of EUR – 173 (71) million relates to derivative financial in-
struments.
Deferred tax effects of EUR – 8 (–) million resulted from tax-rate changes.