BMW 2004 Annual Report Download - page 71

Group Financial Statements 50
Income Statements 51
Balance Sheets 52
Cash Flow Statements 54
Group Statement of
Changes in Equity 56
Notes 57
--Accounting Principles
and Policies 57
--Notes to the Income Statement 66
--Notes to the balance sheet 74
--Other Disclosures 93
--Segment Information 100
--Disclosures pursuant to
§292a HGB 104
Auditors’ Report 107
70
The increase in current taxes is mainly attributa-
ble to the higher tax expense in Germany.
The reduction in the deferred tax expense results
from the lower usage of deferred tax assets as a
result of the utilisation of tax losses.
Deferred taxes are computed using tax rates
based on laws already enacted in the various tax
jurisdictions or using rates that are expected to apply
at the date when the amounts are paid or recovered.
A corporation tax rate of 25.0% applies in Germany.
After taking account of the average multiplier rate
(Hebesatz) of 410% for municipal trade tax and the
solidarity charge of 5.5%, the overall tax rate for BMW
companies in Germany is 38.90% (2003: 40.21%).
The tax rates for companies outside Germany range
from 10.0% to 41.7%. As a result of changed tax
rates in foreign tax jurisdictions, the deferred tax
expense was reduced by euro 4 million (2003: euro
11 million).
No taxes arose in conjunction with extraordinary
items or from the discontinuation of operations in
the year under report. The income tax expense does
not include any amounts relating to changes in ac-
counting policies.
Deferred taxes were not recognised on retained
profits of euro 10,541 million (2003: euro 9,419 mil-
lion), as it is intended to invest these profits to main-
tain and expand the business volume of the relevant
companies. A computation was not made of the
potential impact of income taxes on the grounds of
disproportionate expense.
Taxes on income comprise the following:
[14]Income taxes
in euro million 2004 2003
Current tax expense 841 441
Deferred tax expense 491 817
1,332 1,258