This item includes current income tax expense as well as income/expense from deferred taxes (changes in deferred tax assets and deferred tax liabilities) and comprises the following:
|
2022 |
2021 |
|---|---|---|
Current income tax expense |
|
|
Austria |
14,847 |
15,893 |
Abroad |
17,914 |
32,481 |
|
32,761 |
48,374 |
|
|
|
Income/expense from deferred taxes |
(5,579) |
6,838 |
Total |
27,182 |
55,212 |
|
2022 |
2021 |
|---|---|---|
Current income tax expense |
|
|
Tax expense for current year |
44,464 |
51,018 |
Reduction due to the use of tax losses |
(6,647) |
(7,846) |
Adjustment for prior-period income tax |
(5,056) |
5,203 |
|
32,761 |
48,374 |
|
|
|
Income/expense from deferred taxes |
|
|
Recognition and reversal of temporary differences |
1,939 |
712 |
Effects of changes in tax rates |
(2,598) |
849 |
Change in capitalized loss carryforwards |
(5,778) |
4,524 |
Effects of previously unrecognized temporary differences from prior periods |
102 |
846 |
Changes in valuation adjustment to deferred tax assets (excl. loss carryforwards) |
756 |
(93) |
|
(5,579) |
6,838 |
|
|
|
Total |
27,182 |
55,212 |
The item “Change in capitalized loss carryforwards” relates to the utilization of loss carryforwards in the amount of EUR 566 thousand (2021: EUR 3,271 thousand) and an adjustment to deferred tax assets for loss carryforwards not yet utilized amounting to EUR minus 6,344 thousand (2021: EUR plus 1,253 thousand).
The reconciliation of calculated income tax expense based on the Austrian corporate tax rate of 25 percent (December 31, 2021: 25 percent) to effective income tax expense is shown in the following table:
|
2022 |
2021 |
|---|---|---|
Earnings before tax (EBT) |
(10,059) |
182,926 |
Calculated income tax expense (25 % of earnings before tax) |
(2,515) |
45,732 |
Deductible distribution of hybrid coupon |
(7,188) |
(7,188) |
Tax-free income and tax allowances (particularly research allowance) |
(2,086) |
(2,055) |
Non-deductible expenses, withholding taxes and similar permanent differences |
8,722 |
2,313 |
Income from investments accounted for using the equity method |
56 |
468 |
Effect of different tax rates |
5,847 |
(5,374) |
Changes in tax rates |
(5,111) |
849 |
Taxes from prior periods |
(4,954) |
6,049 |
Exchange rate differences resulting from the translation of tax items from local into functional currency |
(1,282) |
7,902 |
Change in unrecognized deferred tax assets from loss carryforwards, tax credits and other temporary differences |
34,345 |
6,637 |
Other |
1,347 |
(121) |
Effective income tax expense |
27,182 |
55,212 |
As in the previous year, the ratio of effective income tax expense to earnings before tax is disproportionately high in the 2022 financial year. The Group reports a high level of reconciliation items arising from write-downs on tax assets (in particular from non-capitalized losses) (in particular Indonesia, China and Thailand). In addition, as in the 2021 financial year a distribution to hybrid capital holders was realized that is tax deductible.
The “Changes in tax rates” item in the 2022 financial year mainly comprises a statutory tax rate reduction in Austria. The income tax rate in Austria will be gradually reduced from 25 percent to 24 percent with effect from January 1, 2023, and from 24 percent to 23 percent with effect from January 1, 2024. This resulted in income of EUR 5,224 thousand in the 2022 financial year from the measurement of the Austrian Group companies’ deferred tax assets and deferred tax liabilities. In the 2021 financial year, the “Changes in tax rates” item mainly comprised a statutory tax rate increase in the UK. The corporate income tax rate in the UK will increase from 19 percent to 25 percent effective April 1, 2023. This resulted in an expense of EUR 941 thousand in the 2021 financial year from the measurement of the UK Group companies’ deferred tax assets and deferred tax liabilities.
The “Taxes from prior periods” item includes a tax credit of EUR 2,660 thousand (2021: EUR 747 thousand) from the tax group with B&C Group (also see note 39).
Lenzing AG and the Austrian subsidiaries of the Lenzing Group are subject to an income tax rate of 25 percent (December 31, 2021: 25 percent). The income tax rates for foreign companies range from 11 percent to 34 percent (December 31, 2021: from 11 percent to 34 percent).
In December 2021, the OECD published its model rules for a global minimum tax regime. The minimum taxation regime is intended to ensure that corporate groups with worldwide sales of at least EUR 750,000 thousand are subject to an effective tax burden of at least 15 percent in those countries where they operate. The OECD agreement is expected to lead to changes in the corporate tax rates of a number of countries in the coming years. The resultant effects on the measurement of tax assets and liabilities depend on the nature and timing of the legislative changes in the individual countries.