Audi 2008 Annual Report Download - page 211

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10 Income tax expense
Income tax expense includes taxes passed on by Volkswagen AG (Wolfsburg) on the basis of the
single-entity relationship between the two companies for tax purposes, along with taxes owed
by AUDI AG and its consolidated subsidiaries, as well as deferred taxes.
Tax expense consists of the following:
EUR million 2008 2007
Actual income tax expense 983 1,355
of which for Germany 801 1,194
of which for other countries 182 161
of which income from the reversal of tax provisions – 1 – 1
Deferred tax income – 13 – 132
of which for Germany 52 – 99
of which for other countries – 65 – 33
Income tax expense 970 1,223
of which non-periodic tax expenses/income 1 – 1
EUR 799 (1,193) million of the actual income tax expense was passed on by Volkswagen AG.
The actual taxes in Germany are calculated at a tax rate of 29.5 (38.3) percent. This represents
the sum of the corporation income tax rate of 15.0 percent, the solidarity surcharge of 5.5 per-
cent and the average trade earnings tax rate for the Group. The deferred taxes of domestic com-
panies are calculated at a rate of 29.5 (29.5) percent. The impact on deferred taxes of the re-
duction in the rate of company tax was already taken into account during the prior year.
The national income tax rates applicable for foreign companies range from 0 to 41 percent.
The effects arising as a result of the tax benefits on research and development expenditure in
Hungary are reported under tax-exempt income in the reconciliation accounts.
The Audi Group has loss carryforwards totaling EUR 61 (61) million, of which the amount of
EUR 57 (58) million can be used indefinitely. The realization of tax losses led to a reduction in
current income tax expense of EUR 1 (19) million in the 2008 fiscal year. Deferred tax assets of
EUR 149 (164) million were not reported due to impairment. Unused tax loss carryforwards
accounted for EUR 2 (2) million of this amount, tax rebates for EUR 147 (162) million.
Of the deferred taxes reported in the Balance Sheet, a total of EUR 11 (– 161) million was re-
corded with a resulting increase in equity, without impacting the Income Statement. The report-
ing of actuarial gains or losses without affecting income in accordance with IAS 19 led to a re-
duction in equity during the current fiscal year, due to the formation of deferred taxes in the
amount of EUR 17 (– 40) million. The change from deferred taxes to effects recognized in equity
capital for derivative financial instruments led to an increase of EUR 28 (– 121) million in equity.