BMW 2005 Annual Report Download - page 86

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The reduction in the current tax expense is
mainly attributable to tax reimbursements relating to
prior years.
The increase in the deferred tax expense re-
sults from the higher usage of deferred assets as a
result of the utilisation of tax losses, primarily outside
Germany.
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 412% for municipal trade tax and the
solidarity charge of 5.5%, the overall tax rate for BMW
companies in Germany is unchanged at 38.9%.The
tax rates for companies outside Germany range from
10.0% to 40.7% (2004: 10.0% to 41.7%). Changes
in tax rates in foreign tax jurisdictions did not have a
significant impact on deferred tax income or expense
in 2005 (2004: reduction of deferred tax expense by
euro 4 million).
Deferred taxes were not recognised on retained
profits of euro 12,413 million (2004: euro 10,541
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:
[15]Income taxes
in euro million 2005 2004*
Current tax expense 437 841
Deferred tax expense 611 500
1,048 1,341
*adjusted in accordance with Note [8] (b)