29. Deferred taxes (deferred tax assets and liabilities) and current taxes

Deferred tax assets and liabilities relate to the following items on the statement of financial position:

Of the total gross deferred tax assets, EUR 22,020 thousand (December 31, 2024: EUR 30,819 thousand) are due within one year. Of the total gross deferred tax liabilities, EUR 14,952 thousand (December 31, 2024: EUR 8,528 thousand) are due within one year. The remaining amounts are due in more than one year.

Deferred taxes developed as follows:

The Group held tax loss carryforwards of EUR 1,013,826 thousand as at December 31, 2025 (December 31, 2024: EUR 966,073 thousand). The existing tax loss carryforwards can be utilized as follows:

As of December 31 2025, deferred tax assets totaling EUR 2,891 thousand (December 31, 2024: EUR 4,331) were capitalized. Of this amount, EUR 524 (December 31, 2024: EUR 1,844 thousand) are attributable to deferred tax assets relating to Group units that generated losses in either the past or previous year. If there is no substantial evidence for recoverability, deferred tax assets are recognized to the extent that sufficient taxable temporary differences exist.

The valuation allowance on deferred tax assets relates mainly to companies based in Austria in the amount of EUR 123,794 thousand (December 31, 2024: EUR 96,723 thousand), in Indonesia in the amount of EUR 112,083 thousand (December 31, 2024: EUR 113,622 thousand), in Thailand in the amount of EUR 47,862 thousand (December 31, 2024: EUR 45,946 thousand), in China in the amount of EUR 25,415 thousand (December 31, 2024: EUR 33,340 thousand), and in the USA in the amount of EUR 7,199 thousand (December 31, 2024: EUR 7,668 thousand). Certain loss carryforwards were not capitalized because their usability is restricted. If all tax loss carryforwards could be utilized in full, the deferred tax assets on loss carryforwards would total EUR 228,726 thousand (December 31, 2024: EUR 219,736 thousand) instead of EUR 8,634 thousand (December 31, 2024: EUR 16,408 thousand).

The financial assets and other assets shown under deferred tax assets in the above table include amounts for outstanding partial write-downs to investments in accordance with Section 12 Para. 3 no. 2 of the Austrian Corporation Tax Act (“Siebentelabschreibung”, the partial write-downs of investments over a period of seven years for tax purposes) corresponding to a measurement base of EUR 130,653 thousand (December 31, 2024: EUR 179,362 thousand). Deferred tax assets on the total amount of outstanding partial write-downs to investments are recognized only to the extent that taxable temporary differences exist. Partial write-downs of EUR 34,091 thousand were utilized for tax purposes in 2025 (2024: EUR 34,200 thousand).

The recoverability of deferred tax assets is generally based on the positive taxable results expected in the future – after the deduction of taxable temporary differences – in line with the forecasts approved by the Managing Board. These forecasts are also used for impairment testing (see note 10). The assessment of unused tax loss carryforwards and tax credits also involves the consideration of utilization requirements.

Deferred tax liabilities were not recognized for temporary differences with a measurement base of EUR 324,139 thousand (December 31, 2024: EUR 396,234 thousand) in connection with investments in subsidiaries, joint ventures and associates and the related proportional share of net assets held by group companies because the Lenzing Group is able to control the timing of the reversal of the temporary difference and these differences are not expected to reverse in the foreseeable future.

Current tax assets include prepayments made to foreign taxation authorities. These amounts are recognized when the recoverability is probable, while valuation adjustments are made in all other cases. The gross carrying amount of non-current receivables from current taxes as at December 31, 2025 amounts to EUR 11,613 thousand (December 31, 2024: EUR 21,457 thousand). Payments are sometimes uncertain, especially the timing of payments due to the occasionally long duration of proceedings. For this reason, as at December 31, 2025, write-downs of EUR 6,561 thousand were recognized (December 31, 2024: EUR 4,596 thousand).

Current tax liabilities include a provision for uncertain tax items of EUR 9,157 thousand (December 31, 2024: EUR 13,380 thousand) in connection with regular tax audit procedures. In the 2025 financial year, an amount of EUR 3,359 thousand (2024: EUR 0 thousand) was utilized.

Following the retroactive withdrawal of Lenzing AG from the B&C tax group, a new tax group according to Section 9 of the Austrian Corporate Income Tax Act (öKStG) was established for the 2024 financial year, with Lenzing AG as the group parent and five subsidiaries of Lenzing AG as group members. In this context, a group and tax equalization agreement was concluded, under which tax profits and losses are offset between the group parent and the included group members. The deferred tax assets and deferred tax liabilities of the included group members are offset because of the consolidated tax assessment.

The Lenzing Group includes the effects of uncertain tax positions in the calculation of current and deferred taxes. Tax claims are recognized at the expected reimbursement amount in cases where the claim is sufficiently certain. The tax returns of the Lenzing Group’s subsidiaries are reviewed regularly by the taxation authorities. Taking into account a variety of factors, including the interpretation, commentary and legal decisions relating to the respective tax jurisdiction, as well as past experience, appropriate provisions have been made for possible future tax liabilities. In addition, uncertain tax positions are evaluated on the basis of estimates and assumptions for future events. New information can become available in the future that leads the Group to change its assumptions regarding the appropriateness of tax positions. Any such changes will affect tax expense in the period in which they are identified.