BMW 2010 Annual Report Download - page 95

93 GROUP FINANCIAL STATEMENTS
in euro million 2010 2009
Expected tax expense 1,460 124
Variances due to different tax rates – 50 38
Tax increases (+) / tax reductions (–) as a result of non-taxable income and non-deductible expenses 105 68
Tax expense (+) / benefits (–) for prior periods 141 – 26
Other variances – 54 –1
Actual tax expense 1,602 203
2010 2009
Net profit for the year after minority interest euro million 3,218.1 203.6
Profit attributable to common stock euro million 2,958.3 186.5
Profit attributable to preferred stock euro million 259.8 17.1
Average number of common stock shares in circulation number 601,995,196 601,995,196
Average number of preferred stock shares in circulation number 52,663,822 51,833,937
Earnings per share of common stock euro 4.91 0.31
Earnings per share of preferred stock euro 4.93 0.33
Dividend per share of common stock euro 1.30 0.30
Dividend per share of preferred stock euro 1.32 0.32
Earnings per share
Tax increases as a result of non-deductible expenses relate
mainly to the impact of non-recoverable withholding
taxes on intra-group dividends. This line also includes
write-downs recorded in the current year on investments.
The line “Tax expense (+) / benefits (–) for prior years”
mainly reflects the impact of tax field audits in Germany
and abroad.
The item “Other variances” includes the impact of the
reduction in tax expense as a result of utilising tax losses
brought forward for which deferred assets had not pre-
viously been recognised and tax credits, also not pre-
viously recognised, amounting to euro 7 million (2009:
euro 3 million). The tax income for the valuation allow-
ance on deferred tax assets relating to tax losses available
for carryforward and temporary differences and their
reversal amounted to euro 18 million (2009: euro 10 mil-
lion).
Deferred taxes are not recognised on retained profits of
euro 16.2 billion (2009: euro 15.9 billion) of foreign sub-
sidiaries, 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 dispropor-
tionate
expense.
The tax returns of BMW Group entities are checked re-
gularly by German and foreign tax authorities. Taking
account of a variety of factors – including existing inter-
pretations,
commentaries and legal decisions taken
relating to the various tax jurisdictions and the BMW
Group’s past experience – adequate provision has, as
faras identifiable, been made for potential future tax ob-
ligations.
The actual tax expense for the financial year 2010 of euro
1,602 million (2009: euro 203 million) is euro 142 million
(2009: euro 79 million higher) higher than the expected
tax expense of euro 1,460 million (2009: euro 124 mil-
lion)
which would theoretically arise if the tax rate of
30.2% applicable for German companies, and unchanged
from the previous year, was applied across the Group.
The difference between the expected and actual tax ex-
pense is attributable to the following:
15