Annual report 2012

11. Income tax expense

EUR thousand 2012 2011

Current tax expense

205 -18,016

Deferred tax income/expense

-2,780 3,209

Income tax expense charged against profit or loss

-2,575 -14,807

 

EUR thousand 2012 2011

Profit/loss before tax under IFRS

46,262 48,818

Tax rate

-8,327 -9,764

Income tax using the domestic corporate tax rate

-1,605 -8,092

Tax-free dividends

724 544

Non-deductible expenses

13,226 -1,019

Non-deductible expenses in previous period

16,911 23

Non-deductible expenses in the current year

-3,685 -1,042

Change in the tax rate

-5,641 -22

Tax incentives used in the current period

133 1,158

Effect of lower tax rate

1,037 30

Other items

-2,122 2,358

Total income tax expense

-2,575 -14,807

In 2012, the effective tax rate was 5.57% (2011: 30.33%). The low effective tax rate in the reporting period resulted from non-deductible expenses referring to impaired investments, which were disposed in 2012.

The tax rate changed in 2012 from 20% to 18% in compliance with the amended Slovene corporate income tax legislation. In addition, the amount of tax incentives relating to research and development activities increased from 40% to 100% but not exceeding the amount of the tax basis. Tax incentives relating to investments increased from 30% to 40% of the amount invested in a legally defined type of equipment and intangible assets without the upper limit of tax utilisation. The general tax relief for investments shall be mutually exclusive with the relief for research and development.

Provisions of tax-related legislation have not changed in other countries.

As a result of the changed tax rate, the Group recognised lower deferred tax assets and charged them against profit or loss in the amount of EUR 5,641 thousand.


Change in deferred taxes recognised in income statement

EUR thousand 2012 2011

Property, plant and equipment

-1,404 1,086

Investments

1,106 678

Provisions

-1,868 688

Receivables and inventories

-3,423 760

Other assets

2,809 -3

Change in deferred tax assets/liabilities

-2,780 3,209


Change in deferred taxes recognised in equity

EUR thousand 2012 2011
Change in revaluation reserves for property, plant and equipment 345 0
Change in fair value of available-for-sale investments -5 436
Change in deferred tax assets/liabilities 340 436