1.5 Income taxes

Tabelle anzeigen Tabelle ausblenden
Show table Hide table

 

 

 

 

 

 

2019

 

2018

CHF million

 

Total

 

Thereof current taxes

 

Thereof deferred taxes

 

Total

 

Thereof current taxes

 

Thereof deferred taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax rate reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

Profit before taxes

 

203

 

 

 

 

 

348

 

 

 

 

Expected income tax rate in % (rounded)

 

21

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected income tax expense

 

42

 

50

 

–8

 

74

 

59

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-tax deductible expenses/tax exempted income

 

–2

 

–2

 

 

 

6

 

5

 

1

Use of unrecognized tax loss carryforwards

 

–3

 

–4

 

1

 

–5

 

–6

 

1

Effect of non-recognition of tax losses in current year

 

4

 

4

 

 

 

 

 

 

 

 

Recognition of previously unrecognized tax loss carryforwards

 

 

 

 

 

 

 

–2

 

 

 

–2

Tax charges and credits related to prior periods, net

 

–1

 

–1

 

 

 

–6

 

–7

 

1

Non-creditable foreign withholding tax

 

5

 

5

 

 

 

4

 

4

 

 

Effect of change in tax rates

 

–5

 

 

 

–5

 

 

 

 

 

 

Other effects

 

–9

 

–1

 

–8

 

–2

 

–4

 

2

Effective income tax expense

 

31

 

51

 

–20

 

69

 

51

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective income tax rate in %

 

15

 

 

 

 

 

20

 

 

 

 

The Corporation’s expected income tax rate amounts to 21% (previous year: 21%) and corresponds to the weighted average tax rate which is based on the profit/loss before taxes and the income tax rate of each individual Corporate Company. The expected income tax rate based on the ordinary result is also 21% (previous year: 21%).

Management assumptions and estimates

Current tax liabilities are calculated based on an interpretation of the tax regulation in place in the relevant countries. The adequacy of such an interpretation is assessed by the tax authorities in the course of the final assessment or tax audits. This can result in material changes to tax expense. Furthermore, in order to determine whether tax loss carryforwards may be capitalized, it is necessary to assess critically the probability that there will be future taxable profits which can be offset them. This assessment depends on a variety of influencing factors and developments.

The Corporation’s effective income tax rate amounts to 15% (previous year: 20%). The effective income tax rate was affected by the Swiss Corporate Tax Reform that entered into force on 1 January 2020. The reform includes cantonal tax rate cuts and the abolition of special cantonal tax regimes. The cantonal tax rate cuts led to a one-time deferred tax income of CHF 5 million due to the revaluation of the deferred tax positions. In addition, the abolition of the holding company status of Georg Fischer Ltd. led to a one-time deferred tax income of CHF 9 million due to the step-up of hidden reserves for tax purposes in relation to the trademark +GF+. Apart from the one-time effects described above, the overall effects of the Swiss Corporate Tax Reform on GF are assessed as neutral.

The unrecognized tax loss carryforwards in 2019 totaling CHF 127 million (previous year: CHF 132 million) have a potential tax relief effect of CHF 33 million (previous year: CHF 35 million), whereof CHF 98 million (previous year: CHF 110 million) can be utilized for an indefinite period. CHF 1 million is to expire within one year.

As of 31 December 2019, tax loss carryforwards of CHF 19 million (previous year: CHF 22 million) were capitalized, resulting in a deferred tax asset of CHF 5 million (previous year: CHF 6 million).

Management assumptions and estimates

Current tax liabilities are calculated based on an interpretation of the tax regulation in place in the relevant countries. The adequacy of such an interpretation is assessed by the tax authorities in the course of the final assessment or tax audits. This can result in material changes to tax expense. Furthermore, in order to determine whether tax loss carryforwards may be capitalized, it is necessary to assess critically the probability that there will be future taxable profits which can be offset them. This assessment depends on a variety of influencing factors and developments.

Accounting principles

Income taxes include current and deferred taxes. Current income taxes are calculated on the taxable profit. Deferred taxes are calculated by applying the balance sheet liability method for any temporary difference between the carrying amount according to Swiss GAAP FER and the tax basis of assets and liabilities. Tax loss carryforwards are recognized only to the extent that it is probable that future taxable profits or deferred tax liabilities will be available against which they can be offset. The calculation of deferred taxes is based on the country-specific tax rates. Tax assets and liabilities are offset if they concern the same taxable entity and tax authority and if there is an offset entitlement for current taxes. No deferred tax is provided for temporary differences on investments in subsidiaries where the timing of the reversal of the temporary difference is controlled by the Corporation and where it is probable that the temporary difference will not reverse in the foreseeable future.

In order to give you a better experience GF uses cookies. Use of cookies & Disclaimer

https://annual-report.georgfischer.com/19/wp-json/wp/v2/posts/