Operating Activities

(15) Income tax

Income taxes in the consolidated income statement were broken down as follows:

Tax reconciliation

The following table presents the reconciliation from the theoretical income tax expense to the income tax expense according to the consolidated income statement. The theoretical income tax expense is determined by applying the statutory tax rate of a corporation headquartered in Darmstadt of 31.7% (2022: 31.7%).

Income taxes consisted of corporation and trade taxes for the German companies and comparable income taxes for non-German companies. Income taxes relating to previous periods recognized in fiscal 2023 resulted in particular from completed tax audits, changes in income tax liabilities for risks from tax audits, and tax assessments for previous years.

Deferred taxes

The allocation of deferred tax assets and liabilities to the balance sheet items and the reconciliation of deferred taxes in the consolidated income statement and the consolidated balance sheet are presented in the following table:

As in the previous year, the item “Changes in scope of consolidation/Currency translation/Other changes” mainly comprised exchange rate effects for items translated from U.S. dollars to the reporting currency (euro).

Furthermore, a non-recurring deferred tax income on intangible assets impacted in the amount of € 95 million.

Given the positive earnings forecasts, it was assumed that it will be possible to realize recognized deferred tax assets of € 597 million (December 31, 2022: € 191 million), which exceeded deferred tax liabilities relating to the same taxation authority and the same taxable entity, even though there was a loss in the current or previous period.

No deferred tax assets were recognized in the balance sheet for deductible temporary differences and other interest carryforwards in the amount of € 13,220 million (December 31, 2022: € 71 million). The increase in deductible temporary differences for which no deferred tax assets were recognized in the balance sheet is due to the change in the exercise of different tax-related options abroad compared with the previous year. The majority of these differences can only be utilized until 2029. Their utilization for tax purposes is not expected during this period.

Deferred tax liabilities from outside basis differences for planned dividend payouts were recognized in the amount of € 157 million (December 31, 2022: € 79 million). Retained earnings of subsidiaries for which no deferred taxes were recognized amounted to € 10,627 million as of December 31, 2023 (December 31, 2022: € 10,249 million). The resulting temporary differences that will be taxable in future periods in the event of dividend payments would amount to € 603 million as of December 31, 2023 (December 31, 2022: € 582 million).

Changes in tax loss carryforwards

Tax loss carryforwards were structured as follows:

The majority of the tax loss carryforwards either had no expiry date or can be utilized for up to 20 years. This also applies to losses for which no deferred taxes were recognized.

Deferred tax assets resulting from tax loss carryforwards that exceed deferred tax liabilities relating to the same taxation authority and the same taxable entity are not recognized if it is not considered probable that taxable profit will be available against which they can be utilized.

Income tax receivables and income tax liabilities

Income tax receivables amounted to 482 million € as of December 31, 2023 (December 31, 2022: 456 million €) and mainly resulted from tax prepayments that exceeded the actual amount of tax payable for the past fiscal year and earlier fiscal years from refund claims for previous years and from withholding tax claims. As of December 31, 2023, income tax liabilities including liabilities for uncertain tax obligations totaled 1,473 million € (December 31, 2022: 1,522 million €).